Coronavirus  

Beware clawback of government money

Alison Steed

Alison Steed

At the risk of stating the obvious, Covid-19 has been costly – very costly. Not just to the government, but also to businesses of all sizes, the self-employed, the emergency services and the NHS.

Even though we are not yet out of the other side of the crisis – for example, Leicester is still in lockdown as I write this and there are rumours that other areas could follow suit in the not-too-distant future – the government has already started the process of clawing back money that has been paid out.

The first port of call is any fraud thought to have been perpetuated against the system of grants, payouts and furlough support.

It makes sense. Businesses should not be taking government money they are not entitled to.

Especially when you hear anecdotal stories of things like fast cars being bought with unexpected grants that happen to have dropped into the lap of some business owners who do not have any material loss.

I have to point out here these are going to be the few and far between, as by far the majority of people and businesses have been in desperate need of this money to keep themselves afloat thanks to an extended period where they are unable to open for business.

Yet we have already seen arrests relating to fraudulent applications for the Bounce Back Loan Scheme, plus the Coronavirus Job Retention Scheme – or the ‘furlough scheme’ as it is perhaps more widely known.

The sums involved are large too, with two cases in each being between £495,000 and £550,000.

However, the experts are warning that anyone who has taken advantage of these schemes to help keep their businesses afloat can expect some scrutiny from HM Revenue & Customs in relation to how it has been accessed and whether there was any abuse of the system due to incorrect information being provided, or outright dishonesty.

Chancellor Rishi Sunak has given HMRC more draconian powers to target companies it feels have not played by the rules.

Some high-profile companies are reportedly in the crosshairs as they are thought to have asked employees to carry on working despite taking the 80 per cent furlough payments, which come with a clause that the furloughed employee does not work for that business.

For many smaller businesses, just trying to keep their metaphorical heads above water will have been a major task in itself and the grant and furlough schemes have not always been easy to navigate.

Not to mention there is a relatively large group of businesses and workers who have fallen through the gaps in the hurriedly put together safety net.

Just take a look at the Excluded UK group on Facebook if you want to find out more about this. Some of the stories on there are harrowing, and the group has more than 16,000 members.

Yet as expected, the government is starting the process of working out exactly how it is going to balance the books – an essential move if we are going to get the country properly going again.