Majority of firms tried to do right by the rules of Covid support says Sheffield lawyer Jay Bhayani
It could end up being the biggest fraud ever, but most firms ‘tried to do right by the rules’ of Covid financial support.
That’s according to a Sheffield employment lawyer, who spoke out after Sheffield firm Brewster Partners was accused of furlough fraud amid allegations staff were told to carry on working and lie about what happened.
Jay Bhayani, of Bhayani HR & Employment Law, said businesses - especially in hospitality - were panic stricken when the first lockdown was imposed. And the rules on furlough weren’t clear for the first two weeks.
The Coronavirus Job Retention Scheme and easy access Bounce Back Loans created the perfect opportunity for fraudsters - but actual fraud was not widespread, she added.
WHAT HAS HAPPENED IN SOUTH YORKSHIRE?
Two Rotherham men were banned from being directors after taking out bounce back loans worth a total of £200,000 and closing their firms.
Muneef Ihsan was the director of three companies given a total of £150,000. Mahir Towid Ul Haque got a £50,000 loan and used it to buy a Rolex watch, the Insolvency Service said. Investigators said there was no evidence any of the companies had ever traded.
Bhayani Law customers include the British Innkeepers Association which has 10,000 members.
Jay said: “I know a lot of businesses that were caught out, but initially no one knew what furlough was and the rules were not clear. But within two weeks it was clear that those on furlough must not work.
“Some claimed without employees’ knowledge and staff carried on doing their day jobs.
“Others took out loans but then closed the doors and vanished with the money. It’ll be the biggest fraud ever.”
WHAT IS HMRC DOING ABOUT FRAUD?
HMRC was too busy at first but did start investigating and set up the Taxpayer Protection Task Force, she added.
“There is a whole new industry of people appealing and defending fraud claims but I don’t think fraud was widespread,” she said.
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HM Revenue and Customs’ annual report earlier this month revealed £5.2bn, about 8.7 per cent, of the £60bn it paid out under the furlough scheme in the 2020-21 tax year was claimed fraudulently, or paid in error.