Closing date for furlough applications

LilElvis

From your other thread you clearly have an accountant - ask him for his advice as to whether your proposal would pass the tests of the scheme. You've clearly convinced yourself that you can find a way to work the scheme to your personal advantage and don't want to accept any interpretation that doesn't agree with yours so perhaps you might listen to your accountant.

leitmotif

There's an easy way to avoid fraud. The guidance says you have to have agreed in writing. I write that I am to be furloughed from the point in the past at which I last worked for the company (more than three weeks ago, so the minimum three weeks criterion is already covered) until further notice (or until the scheme ends). There's nothing in the clause quoted earlier in this thread to stipulate that the letter must specify an end date. Then, if and when an order comes in, I serve myself the 'further notice'.

leitmotif

LilElvis said:

You've clearly convinced yourself that you can find a way to work the scheme to your personal advantage and don't want to accept any interpretation that doesn't agree with yours

Nonsense. The truth is that, useful as MSE's forum is, a certain percentage of people posting here seem to derive a degree of perverse satisfaction from shooting people down. The questions I'm asking (in this thread and in the other) are perfectly reasonable. Unfortunately, one has to navigate beyond the shooting gallery to get to the point where detailed consideration of a topic starts to bear fruit. In the thread you mention, we eventually got there. And in direct contradiction to your claim that I 'don't want to accept any interpretation that doesn't agree with mine', I accepted an interpretation that didn't agree with mine.

unholyangel

neilmcl said:

unholyangel said:

leitmotif said:

unholyangel said:

You are only considered furloughed for the purposes of CJRS starting on the day you & your employer agree to the furlough in writing. 

6.7 An employee has been instructed by the employer to cease all work in relation to their employment only if the employer and employee have agreed in writing (which may be in an electronic form such as an email) that the employee will cease all work in relation to their employment.

You cannot retrospectively furlough yourself. You are either not required to be available for work or you are required to be available for work (even if no work comes in). 

See above. One-man limited company. I'm both employer and employee.

I know this, but the rules on the furlough start date are the same. There's no special consideration for one man bands. 

The point he's making is that as an ltd company director, he's in a position to produce back dated documentation stating that he was furloughed from the 1st of March, or whenever. The HMRC wont know whether it was backdated or not.

The point we've been making is that one man bands are going to be subject to higher scrutiny. There are high risk areas for fraud and this is one of them for exactly the reason you mention.. 

By claiming from the scheme, you give hmrc the right to audit any aspect of your claim at any time. If they happened to do this and discovered the deceit you're looking at paying back the money you received plus interest, penalties, potentially a criminal conviction, most likely disqualifcation as a director for falsifying company records & committing fraud which means either someone else having control of their company & calling the shots or them having to shut down as a limited company and having to pay NI & income tax on earnings they previously drew as dividends. Further to that, they'd also likely be subject to strict compliance checks by hmrc for a few years at least. 

Why anyone would take that risk for what is probably £575-833 a month (80% of typical directors paye salary) for a short term period is beyond me. Especially when there are risk free options available such as furloughing 3/4 weeks and scheduling any work to be done on that one week. 

leitmotif

unholyangel said:

The point we've been making is that one man bands are going to be subject to higher scrutiny. There are high risk areas for fraud and this is one of them for exactly the reason you mention..

I've presented a solution to the potential fraud issue (open-ended letter) above, but if (hypothetically) one did go down the route of amending a date retrospectively, it would be utterly undetectable.

LilElvis

neilmcl said:

unholyangel said:

leitmotif said:

unholyangel said:

You are only considered furloughed for the purposes of CJRS starting on the day you & your employer agree to the furlough in writing. 

6.7 An employee has been instructed by the employer to cease all work in relation to their employment only if the employer and employee have agreed in writing (which may be in an electronic form such as an email) that the employee will cease all work in relation to their employment.

You cannot retrospectively furlough yourself. You are either not required to be available for work or you are required to be available for work (even if no work comes in). 

See above. One-man limited company. I'm both employer and employee.

I know this, but the rules on the furlough start date are the same. There's no special consideration for one man bands. 

The point he's making is that as an ltd company director, he's in a position to produce back dated documentation stating that he was furloughed from the 1st of March, or whenever. The HMRC wont know whether it was backdated or not.

Unholyangel is right - HMRC will, over the coming years, be scrutinising these claims. Unlike normal investigations they will be focused on a very narrow timescale and will be totally aware of what infractions will have been perpetrated. I was an auditor for many years - mainly small and medium sized businesses like the OPs - and had the joy of dealing with the fallout from tax investigations whilst the clients were faced with repaying the underpaid tax (often NIC too), penalties, interest and our fees. In my last full-time job as payroll and benefits manager for a FTSE company I spent what felt like half my time dealing with auditors and HMRC - I even had my own dedicated Inspector who kindly visited me two or three times a year because of the nature of the payroll and particularly the benefits and the eye-watering amounts of additional tax due. This scheme is going to have to be paid for at some point and it is a reasonable assumption that the government would rather do so by clawing back wrongful claims than raising taxation on employees and companies. 

pleasedelete

You cant furlough from the 11th- the earliest is the 21st- the government didnt launch the scheme until the 20th March. You didn't make yourself redundant prior to the 20th March. 

unholyangel

leitmotif said:

unholyangel said:

The point we've been making is that one man bands are going to be subject to higher scrutiny. There are high risk areas for fraud and this is one of them for exactly the reason you mention..

I've presented a solution to the potential fraud issue (open-ended letter) above, but if (hypothetically) one did go down the route of amending a date retrospectively, it would be utterly undetectable.

It would be detectable. Just whether it would be worth the expense/effort of detecting it is another matter. 

But hmrc don't operate as normal. LilElvis said either on this thread or another about HMRC investigations and they were bang on the money. 

They come back to you in 12 years asking you to prove your income and you don't have the records? Thats okay, they'll just guess and then you have to prove them wrong. It's not a case of them having to prove it or you just holding up your hands and saying "sorry, can't help you". They just need to have suspicion and then can request access to all sorts of information to help them while still putting the burden on you to disprove their suspicions.

It's definitely not something I'd ever want to be on the receiving end of. 

leitmotif

pleasedelete said:

You cant furlough from the 11th- the earliest is the 21st- the government didnt launch the scheme until the 20th March. You didn't make yourself redundant prior to the 20th March. 

The scheme is for people who are being kept on and (to a lesser extent) for people being rehired. You can furlough from 1 March, assuming the employee hasn't carried out any work for the organisation since that date.

leitmotif

unholyangel said:

It would be detectable. Just whether it would be worth the expense/effort of detecting it is another matter. 

How?