HMRC gives employers 30 days to come clean over furlough support claims

Howdenshire-based tax dispute specialist Independent Tax is warning that new powers enabling HMRC to pursue employers and company directors who have misused the Government’s Covid-19 furlough support packages will further add to the pressure faced by business as a result of the pandemic.

Last week, Chancellor of the Exchequer Rishi Sunak amended the Finance Bill to give HMRC the power to pursue those who abuse the Coronavirus Job Retention Scheme (CJRS) and the Self-Employed Income Support Scheme (SEISS). The new powers will allow HMRC to charge 100 per cent tax on payments that have been made to employees since the schemes were introduced in March of this year. HMRC will also be able to pursue small companies that received a government grant of up to £25,000. Action will be taken if they believe that the business did not require a loan or ceased trading shortly after receiving the funds.

The Finance Bill is expected to receive Royal Assent in mid-July, at which point it will become law. From that date, any business or individual that has received payments from CJRS or SEISS will have just 30 days to inform HMRC that they applied by mistake and pay the amounts back without penalty.

Gary Brothers, Managing Partner of Brackenholme-based Independent Tax, explained: “HMRC believe that fraud and mischief exists in various areas, including businesses that have required staff to continue working despite receiving the 80 per cent furlough payments from the government; businesses that have not passed the full furlough amount on to their employees; self-employed people ‘moonlighting’ on other work, despite having taken support; and self-employed people falsely amending their tax returns to maximise their SEISS payments.”

In May, Independent Tax was made aware that HMRC was already conducting more than 1,000 investigations into potential furlough ‘abuse’ as a result of information received from whistleblowers through its fraud hotline. Less than one month on, HMRC has advised that the number of investigations is now closer to 2,000. 

Gary continued: “In addition to relying on whistle-blowers, HMRC is at pains to point out that they have access to an incomprehensible wealth of information and cutting-edge forensic review technology, which allows their Risk & Intelligence Teams to trawl through millions of pieces of data in seconds to find furlough ‘abuse’, without the need for whistle-blower information.

“Because these new powers are being introduced at a new 100 per cent rated tax band, the penalties provided for in the Taxes Acts will apply, which means that, on top of an employer having to repay all the money to HMRC, they could also be issued with penalties of up to 100 per cent, as well as interest! In the worst cases, HMRC has said that it will seek to criminally prosecute people.”

He advised: “What’s alarming is that the burden to prove otherwise and discharge the enquiry sits with the those being investigated. As such, we strongly recommend that detailed records of any claims under CJRS or SEISS are kept for the statutory period of six years.

“If you believe that an application for either CJRS or SEISS payments was made mistakenly and that such an admission needs to be made to HMRC, expert advice should be sought. At this point in time, we are uncertain how HMRC will approach these disclosures but, based on our collective experience of working for both HMRC and private practice, the view tends to be that if a taxpayer is treating their affairs incorrectly there’s a strong chance that they’re doing so in other areas too. Expert advice could help to minimise the risk of a voluntary admission of a mistake spreading exponentially into other areas of your tax affairs.”

 

Tourism awards for local businesses

A number of businesses from the Howdenshire area were among the winners at the 2020 Remarkable East Yorkshire Tourism Awards. The annual awards ceremony at Bridlington Spa had to be cancelled this year due to the Covid-19 pandemic, so the host, Blair Jacobs, announced the winners from the comfort of his living room instead!

One of the new categories introduced this year was the Remarkable Ethical, Responsible and Sustainable Tourism Award, which was won by William’s Den, of North Cave. Judges praised the “highly professional and well-integrated activities outdoors and an imaginatively arranged wooden indoor play area”, which they described as “an extremely well-designed building making great use of recovered, renewable and natural materials and thoughtfully planned for the benefit of less able users.”.

Meanwhile, Hotham’s Gin School took the Remarkable Experience of the Year title for providing a  ‘thoroughly entertaining and enlightening experience’.

The Remarkable Hotel Award was won by Saltmarshe Hall, near Howden, which the judges said is run by a ‘great team of people who are passionate about their work’. 

The full list of the winners is as follows:

Remarkable New Tourism Business Award – Bonus Arena, Hull.

Remarkable Bed & Breakfast and Guest House of the Year – The Wold Cottage, Wold Newton.

Remarkable Ethical, Responsible and Sustainable Tourism Award – William’s Den, North Cave.

Remarkable Visitor Attraction – Sledmere House.

Remarkable Restaurant of the Year – Rupert & Darwin, Hull.

Remarkable Local Producer Award – Wold Top Brewery, Hunmanby.

Remarkable Tourism Event – Pride in Hull.

Remarkable Camping, Glamping and Holiday Park of the Year – Wold’s Edge Holiday Lodges, Bishop Wilton.

Remarkable Accessible and Inclusive Tourism Award – Broadgate Farm Cottages, Walkington.

Remarkable Cuppa – The Granary at Rustic Riddle, Ulrome.

Remarkable Business Events Venue of the Year – DoubleTree by Hilton, Hull.

Remarkable Pub of the Year – The Lion and Key, Hull.

Remarkable Self Catering Accommodation of the Year – Broadgate Farm Cottages, Walkington.

Remarkable Hotel – Saltmarshe Hall, Saltmarshe, near Howden.

Remarkable Experience of the Year – Hotham’s Gin School, Hull.

Siemens Mobility selects Selby College as its Goole training partner

Siemens Mobility Limited has announced it has chosen Selby College as its training partner for its new rail facility in Goole, which aims to create up to 700 skilled jobs locally, as well as 250 other roles during the construction phase.

As part of this, Selby College will act as a key part of the Level 3 Rail Technician Apprenticeship programme. Apprentices will spend their first year at the College developing core engineering skills, as part of a comprehensive, three-year training programme beginning in September 2020, through to joining the workforce at the Goole factory when it opens in 2023.

Phil Sayles, Principal and Chief Executive of Selby College, said: “We’re delighted to be supporting Siemens Mobility as they deliver one of the most significant developments in this area for decades. Now more than ever, it’s vital that we train local people so they can take up new opportunities and fill roles, which are vital to the UK’s future and to rebuilding the nation’s economy following COVID-19.”

Siemens Mobility has already received 200 applications for the facility’s first 12 apprentice roles, with the majority of applicants from East Yorkshire and Lincolnshire.

The apprentices will be the first of up to 700 employees for the pioneering rail manufacturing facility, which is expected to start later this year, pending detailed planning approval from East Riding of Yorkshire Council. The project will be complemented by research and development, digital innovation and supplier facilities, together forming a unique “rail village” at the Goole site.

Sambit Banerjee, Managing Director Rolling Stock and Customer Services, for Siemens Mobility Limited, said: “The appointment of Selby College is another important milestone for our Goole facility and will have a key role to play in helping us create a legacy of highly-skilled engineers.”

He continued: “The number and quality of applications indicates the level of interest in this incredibly exciting project. The demand for these entry-level opportunities bodes well for future recruitment for a wide range of manufacturing, engineering and associated roles as the project continues to move forward.”

 

 

Tax expert busts myths surrounding the impact of coronavirus on tax investigations

After spotting a number of misleading news stories about the impact of the current coronavirus pandemic on tax investigations and enquiries, one of the UK’s leading tax experts has been attempting to separate fact from fiction so that businesses and individuals know exactly where they stand.

Howdenshire-based Gary Brothers is the Managing Partner of Independent Tax, which is the largest HMRC-handling and tax dispute specialist in the North of England and has its headquarters at Brackenholme.

He explained: “In recent weeks, I’ve read media coverage suggesting that HM Revenue & Customs is stopping all investigations and enquiries due to coronavirus. However, this is only partially true, so I think it’s important to separate fact from fiction.”

Gary, who is pictured (centre) with some of his colleagues, revealed: “Between late March and mid-April, HMRC wrote to customers who are the subject of a tax enquiry or investigation, along with their advisors, to inform them that they would be suspending those enquiries or investigations. This was to allow those customers to deal with the ongoing uncertainty caused by the coronavirus pandemic and to avoid adding to the worry or burden they were facing. Of course, it also helped HMRC, which lost frontline staff due to the need for some people to self-isolate and also had to redeploy many thousands of staff to emergency coronavirus-related roles, such as the furlough wages scheme.

“It’s important to note that HMRC is only ‘suspending’ investigations and enquiries. The letters that people will have received included a very standard form of words and were issued by the thousand.”

Gary also highlighted the fact that, rather confusingly, HMRC’s own policy documents suggest that they will NOT suspend enquiries but will continue where they need to tackle ‘the most serious criminal cases’ or ‘those exploiting the crisis to promote tax avoidance.’

He explained: “It appears that HMRC’s original plan was to suspend enquiries until the end of April and then resume business as usual. However, with a further three-week lockdown announced by Government, it’s widely expected that HMRC will extend the suspension period until the end of May.”

Gary pointed out that the letters sent to customers also state that HMRC will continue with enquiries or investigations in cases where the customer, or their advisor, contacts them to say that they do not wish to suspend matters, explaining: “This is an aspect of the story that has not been widely reported by the media, yet around 70 per cent of our clients have said that they wish to continue with their enquiries or investigations.  Many people feel that facing an HMRC investigation is bad enough without the added pressure of the uncertainty caused by the coronavirus pandemic. Therefore, most of our clients would like to try to resolve their HMRC matter as soon as is practicable.”

Gary fears that the inevitable confusion prompted by some of the media coverage he’s seen could have led some businesses and individuals facing an investigation or enquiry to assume that it will simply ‘go away’.

He said: “Sadly, this is the stuff of fantasy and definitely a bust-able myth! It’s important that people understand that enquiries and investigations are only suspended temporarily, but also that customers subject to an enquiry or investigation can request that HMRC continue with it if they wish to.

“For those customers who agree to suspension for now, there is absolutely no indication that HMRC will simply drop that enquiry or investigation and walk away without concluding it. For a long time now, HMRC has had very little discretion to do ‘deals’ or walk away from what they consider to be the correct level of tax due and there is no indication that this scenario will change post-coronavirus.”

“As a business specialising in HMRC investigations and enquiries, during the last four weeks Independent Tax has had contact with more than 100 senior HMRC investigators and not one of them has indicated that the suspension is anything other than that.”

Gary added: “In fact, there has been speculation that HMRC’s investigators will be even more active post-coronavirus as the Government looks to re-fill its coffers. So, I’m afraid that’s another myth firmly busted; there is no indication that HMRC will quietly drop investigations and enquiries due to the coronavirus pandemic.”