Limited company abusing coronavirus help

alanalan77

I have recently been furloughed from my job, I work for a limited company doing maintenance/insurance work. The majority of us have been furloughed. I say the majority, as there are some “employees” still on the payroll. Namely my bosses sister, father in law, mother in law and some contractors who are actually working on the owners house renovations  but being paid by the business. Materials for their house are also being ordered through the business. They were recently gloating that they’d had a coronavirus business loan and so could have a new £70k kitchen - ordered through the business of course, as well as an extension, new windows etcetc They pay themselves minimum wage to avoid tax.
I know this sounds like sour grapes on my part - and it is, I’m on my !!!!!! on furlough, but surely the tax man will catch up with them on this?! It just seems such an abuse of the system, when other businesses are struggling.

Runner5_2

This makes me angry too. Can you anonymously report them? If there is an investigation and they're doing things by the book, there'll be no harm done. 

Jeremy535897

I am not sure whether you are saying that the owner directors have furloughed themselves and are still working? The issue you describe is tax evasion, if they are claiming tax relief in the company for materials and wages for work on their own house, and not paying the company for using those materials and wages (by debiting loan accounts or otherwise). If HMRC investigate, they will soon uncover this.

Sibbers123

Yes you can report tax evasion. Whether HMRC investigate, that’s a different question due to lack of resources.

https://www.tax.service.gov.uk/shortforms/form/TEH_IRF

Grumpy_chap

You have been furloughed and the company has a contract to build a kitchen extension for a Client, which keep some of the employees on full time.  You are receiving 80% for not working while some are working and getting 100% - they may see that unfair as much as you do.

The Ltd Co is one entity, and that entity has taken a CBILS as the Ltd Co has been affected by coronavirus - reduced work.  The Ltd Co will need to repay the CBILS in the future.

The owner of the business (separate legal entity) is now a Client of the Ltd Co.  The owner will need to pay the bill to the business.  For the owner to draw funds from the business will all need to be recorded through accounts and tax liabilities apply, either salary or dividends.

The owner may say they are supporting the business by placing work to keep people employed while the business would otherwise have nothing and close.

You might see this as unfair, and I understand why it may look 'dodgy' to you, especially with the comments that have been made.  The funding of the business is also not really any of your concern, you are getting your furlough paid and will have a job to return to. 

JakeMM

It’s a loan, they’re fully entitled to do this - and they’ll be required to pay back the £70k cost and more to cover the 2.5% interest. 

These loans are doing exactly what they are meant for. They’re supporting your boss, they’re supporting his workers and the money is also working its way to builders merchants, and keeping them going. 

The government then gets tax money back from VAT on all those building materials, they get tax back from the employees, tax from the builders merchants and all the individual suppliers, plus they get their £70k back plus more to cover interest. 

This is win-win for the government!