Viewing 40 posts - 41 through 80 (of 153 total)
  • Employer committing fraud – opinions please
  • TheBrick
    Free Member

    Sounds like the company is going under anyway.

    If you do a tip off make it anonymous as if it effects others then some people will take offense.

    Cover your back with emails and recorded phone calls of you questioning things.

    Write a diary. Not just facts but feeling of being pressured and the conflicts of doing the right thing Vs having a job.

    TheBrick
    Free Member

    P.s. I am really sorry to say this but from what you say you’ll be loosing your job in all of the most likely scenarios. It’s a question of timing and circumstance. Try to make both beat for you. At least wait until you have been paid this month.

    myotherusername
    Free Member

    How did this happen? Is there a paper-trail to prove a directive came from your employer? If not, how can you be certain the other employees are actually working?

    Can the management plausibly say we didn’t expect, or know, the employees continued to work?

    I have emails from the directors asking me to do work, and asking for information to help with their work, basically everything I would normally do. I know other staff members are working, I can see what they have done, I talk to them on the phone, and am cc’ed into a few emails asking them to carry our certain tasks so have some written evidence that management are asking them to do this.

    Our salaries are not being topped up by the company, we are on 80% only, since the company cannot afford to make up the difference (We are doing less work since there is less to do, but even so) See earlier comments about the difficulty of finding other jobs just now, we are trying to keep the company alive. It may be viable once all this has blown over, see the earlier comment about redundancies and closing an office, big reduction in costs. However, repaying the government grants, and any possible fines, will be nigh on impossible, never mind the damage to the reputation of getting caught.
    IF we come out of this with enough money once business picks up it may be an idea to say to HMRC ‘whoops, we made a mistake, here’s the money back.’ Previous experince suggests they can be forgiving of genuine mistakes if you own up and correct it, my conscience would probably be fine with a lie to say it was a genuine error, incorrect paperwork or whatever, and repaying the money. IF we can afford it that would be the best option but we won’t know until the christmas selling season if we can afford to do that, until then we need every penny

    You are not allowed to do ANY work while furloughed (I’m not sure what the rules are if you decide to answer the phone or whatever off your own bat, it would be difficult to stop someone doing that, but the employer cannot ask you to do any work) You are allowed to receive (but not give) training.

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    markgraylish
    Free Member

    Ok, pretty clear then as there’s no plausible deny-ability…

    In which case, I’d craft a carefully worded email telling them you are no longer working and you will be taking the furlough seriously and make sure they see you have cc’d your personal email address.

    Mention that you expect you’ll happily work through any backlog of work once the furlough is over.

    I’d mention that you consider they have put you in an untenable position and you expect them to fix it.

    I’d call the finance director just before I send it and explain that you are ONLY doing this to cover your own ass as you feel vulnerable. Make sure he knows he call phone you if anything REALLY urgent crops up and needs advice from you.

    And tell them to stop using emails and leaving paper trails everywhere! 😉

    mtbqwerty
    Full Member

    My 2p.

    How long will the sister company continue to provide loan after loan to keep your employer afloat? Is your employer integral to their operation, or are they being ‘nice’? To put it bluntly, how secure is your job?

    How much work is being asked to be carried out at work, is it the odd hour here or there, or full time activities? If I were being paid 80% of my salary, working full time I’d be rather miffed. If they are just asked to do a couple of hours, I appreciate it’s against the furlough rules, but it’s not as morally bad.

    As your employer is in a rural area, is it eligible for grants from the government to keep afloat?

    kenneththecurtain
    Free Member

    They’re committing fraud, which we’re all paying for. You know about it, and could ultimately be implicated in it if you do nothing to stop it.

    It’s an easy choice*

    *I did read the bit about if being difficult to find a new job, and I understand. I’ve been in a similar-but-different situation as an engineer, being pressured to sign off on something I knew to be unsafe. That wasn’t a difficult decision in the slightest, I had a professional and moral obligation to do my job properly.

    n0b0dy0ftheg0at
    Free Member

    This scenario seems to be happening in a lot of places if posts are to be believed and it boils my urine a bit if I’m honest, but then so does receiving 80% wages while being furloughed and legally complying with what that is supposed to entale, keeping plenty of online companies afloat with non-essential “buying of the world” Xmas levels of parcel orders over the past ~8 weeks.

    As a “keyworker,” I look forward to Sunak telling us that we will be exempt from the massive Income Tax hike that the rest of society will be crippled with over the coming decades, paying back fraudulent furlough claims that those that knew it was wrong stood back and didn’t do the right thing.

    FunkyDunc
    Free Member

    I know a firm of solicitors that is doing what OP suggests. You would have thought they would have more integrity.

    There needs to be a website where you can name companies that are doing the right thing at the moment ie going above and beyond, and those that are being idiots ie avoid using in the future

    richardk
    Free Member

    Don’t forget that we’ve just completed a UK wide experiment in home working and found that it works for any office job.  Your next career step isn’t limited by what you can commute to.

    Document your evidence

    look for full time WFH role elsewhere

    whistle blow on current employers

    FuzzyWuzzy
    Full Member

    Just embezzle enough money to send the company over the edge and into bankruptcy – not like they can report you and you end up with money to tide you over whilst looking for a job and you stop the company ripping off the taxpayer, win-win :p

    ferrals
    Free Member

    Seems pretty clear the ‘right’ thing to do is to let HMRC know, however maybe it’s better to try and get it fixed internally?

    i would be inclined to email both directors explaining the situation in clear language and the consequences and explaining they should either un- furlough staff or get them to stop working. While you say the other director knows the legality he may not full appreciate it until its before him in black and white?

    Keep a record and if they ask you to leave you could argue unfair dismissal.

    Through the grapevine, I have heard of so many companies doing this. I’ve also heard that there will be pretty in-depth investigations conducted once this is all over to try and catch those who did break the law. I’m not sure of the reliability of this but it would be easy to do and would make sense.

    duncancallum
    Full Member

    If its that close to going bump your out of a job anyway……

    Dont go down with the MD.

    crazy-legs
    Full Member

    Anyone here know anything about whistle-blowing?

    Yes, I’ve just rewritten the policy for the place I work at, the old one being out of date.
    It’s quite procedure-heavy, there’s a clear hierarchy of who to go to, the first person being the Finance Director (that’s a legal position, he/she is Section 151 Officer).

    Second person being the Chief Executive.

    If the rot in the company is coming from the top, you can go external but you need much more than just “reasonable grounds of suspicion” for that and you have to be careful about confidentiality. There are procedures in place to protect the whistle blower but there are also procedures to prevent disgruntled employees seeking revenge so you need to be absolutely certain that the company can’t turn round and blame you for just being upset, disgruntled etc while covering their own tracks.

    Also, you’d be very surprised what audit trails can turn up if the auditors are doing their jobs properly..!

    crankboy
    Free Member

    The solution is easy it is the consequences of the solution that are hard.
    ” My employer is a criminal but I and others benefit from their crime , what should I do ”
    If you say nothing you are complicit in the crime.
    If you negotiate a deal for silence that’s as above but also blackmail.
    If you challenge them they stop with face covering about a misunderstanding or bad advice, if they treat you badly because of that you sue them for constructive dismissal.
    If they carry on they will go under at some time, hmrc will be a priority creditor they will go through the books they will scrutinise the furlough payments they will detect the fraud they will pursue all options for recovery of the funds including criminal prosecutions against directing minds as that involves personal financial liability so no hiding behind the LTD co.
    It’s clear from your posts you know what the right thing to do is , talk to them make it clear they can’t do this. If they carry on contact hmrc keep detailed contemporaneous records of all communications.

    boblo
    Free Member

    Cougar
    Subscriber
    How about this:

    If you’re furloughed and not expected to work, you are no longer their accountant and it’s not your problem.

    If however you are expected to work then it’s your duty as a working accountant to report this infraction to HMRC.

    Ask them to pick which one they would prefer.

    Nicely cut through the bullshine Cougar.

    And scenario (6). You now have a much shorter commute that sadly doesn’t include Trail Centres but does include showers, soap and bigger boys…

    As a minimum, you need to record (email) the discussion with the FD where you raised it as an issue (being illegal) and they said ‘it’ll be fine – crack on’. I’m not sure this exonerates you at all but covers your arse to a degree.

    I know it’s easy for me and others to say, but is your current convenience worth the ‘cost’ of working in this sort of Business? I hear the ‘there’s not much choice’ point but there always is, it’s just one we don’t wish to make.

    Good luck.

    MoreCashThanDash
    Full Member

    I think the key factor here is your own professional reputation/situation.

    You either hope that the docs you’ve got at home give you enough distance to avoid professional discipline, and they’ll stop at the Finance Director, or you have to report it to save your long term career, and take the short term hit.

    This particular problem must be widespread, but will be on a scale from “I know you are furloughed but can you just have a quick look…” to “the government is paying your wages, be grateful you aren’t redundant”

    HMRC were stepping up fraud recruitment prior to Brexit/Covid – I’m on a reserve list to transfer over – but not sure where the priority will be to double-check these cases when things get closer to normal.

    MrsMC works in child protection – in the age of austerity she has to spend as much time making sure that she won’t be the fall guy if a child dies rather than the managers.

    SuperScale20
    Free Member

    Horrible situation your in but dont you have a duty to report this, what if someone elses reports would it not lead back to you?

    tomd
    Free Member

    I wonder if you’re thinking too hard about what might happen if you do what you clearly know is the right thing to do.

    If you stay where you are the only certainty is that you will get deeper into this criminal mess. It is also highly probable the company will go under sooner or later.

    If you have any young kids around try explaining your predicament to them. They usually spot the big glaring mad mental flaws in things. “Daddy works for a company with no money who steal money to keep going.” “Stealing is bad”. “No it’s only bad if it doesn’t benefit you”. “So I can steal sweets from the shop?”.

    maccruiskeen
    Full Member

    I think its important in the OP’s professional position and future prospects to be open and honest with the HMRC. His bosses shouldn’t involve someone in a scam who is paid to know better. My gut feeling though is the HMRC themselves might be more relaxed about the situation than you might expect. There are ‘rules’ about furlough but theres also a ‘spirit’ behind furlough – which was to stop companies in difficulty immediately jettisoning staff.

    Keep in mind..Employers are  being askedh to bring staff back under furlough – the recently redundant-  people who had left for other employment and had that job vanished – freelance PAYE etc as much as protect their standing workforce. They are being asked to furlough anyone and everyone they can. The point really of the furlough scheme is to prevent he welfare service being overwhelmed by effectively outsourcing welfare payment processing through employers.

    In terms of business practice and insolvency the rules have been relaxed there too. Again to try and prevent massive job-loss and more pressure on the welfare services.

    Its not the money its the man-power – the welfare system is trying to operate with a workforce thats had to move from call centres to kitchen tables.

    If the company was massively profitable and also bleeding the furlough scheme that would be one thing – but this scenario, while not a good one is still achieving the goal of keeping people off the dole queue at least for a while.

    In making the HMRC aware there may well be consequences – like they may stop furlough payments or ask that the furloughed staff to stop working…. (keeping in mind there will be a move towards part time work/furlough mixes which would be even harder to police)  but there may not be the retribution you would expect.

    gfsracing
    Free Member

    Im sure the HMRC or your auditors will be doing some checks.

    If the employees have been emailing etc then its pretty clear fraud has been commited

    I would send then the email as above then look for another job

    willjones
    Free Member

    Our (normally very viable) organisation is bending over backwards to keep afloat and within the law during this pandemic. If there are painful decisions to make around redundancies or closure then it is the senior team’s job to do make those decisions. It comes with the territory. As does operating within the law. Read your whistleblowing policy and if there is genuine concern and evidence to support, blow the whistle. As an accountant you also have a responsibility to operate within the law. What will the auditor ask you when they sense any irregularity? Will you have acted, and promptly enough in their eyes?

    FB-ATB
    Full Member

    Hi- I’m an accountant in a small/medium sized manufacturing company, we currently have staff on furlough. As we have just had our year-end, I’ve had a lot of discussions with our auditors about how the audit will work this year. One item that cropped up is the furlough scheme.

    They are expecting to be tasked with policing the scheme, so where the submission had Joe Bloggs on furlough, they will be checking time sheets etc. If we’ve got half the factory on furlough, then they expect output to be down.

    A lot will come down to your businesses’ relationship with the auditor -how much fee income they would lose if the audit was taken elsewhere?

    If you’re the person submitting the payroll and furlough data then that’s quite a burden and hard to use “following orders line”.

    I think on the HMRC site they expect employees to help police the furlough as well.

    A tough decision as it’s your career at stake and possibly other employees livelihoods. Easy for us not affected to say call the HMRC/get a new job.

    crazy-legs
    Full Member

    Problem is, the outcome is the same.

    The company sounds in financial trouble so short of another bail-out or a full buyout, it’s probably going under with the loss of all jobs anyway.
    CEOs seem to have a habit of coming out of these unscathed, miraculously appearing a few months later at the head of another company. However if/when bankruptcy looms and the auditors find the furlough issue, HMRC becomes the largest / primary creditor.

    So that’s what happens if you say / do nothing.

    Whistleblowing results in the same outright end of the company going under and everyone losing their jobs but at least you’re not in the firing line from it.

    chakaping
    Free Member

    True.It is the right thing to do.
    But is likely to cost me my job,

    But will it cost you your career if you don’t?

    If the company gets busted, and even if you avoid prosecution yourself, will future employers find the court case details when considering you for an accountancy position elsewhere?

    carbosteve
    Free Member

    I believe you may be protected by whistleblowing legislation if you approach it in the right way:

    http://www.gov.uk/whistleblowing

    thisisnotaspoon
    Free Member

    (I have no idea what you are/are not allowed to do when furloughed)

    Short answer : anything

    Long answer : anything related to your employer

    You can go out and get a second job, but you can’t work for the one that’s furloughed you, that’s the whole point.

    I believe you may be protected by whistleblowing legislation if you approach it in the right way:

    http://www.gov.uk/whistleblowing

    +1, blow the whistle and let HMRC decide whether it’s worth pursuing. Byt he sounds of it the’ll be bankrupt before long either way, at leas this way you get to leave with your head held high and some professional reputation/integrity.

    Would you really want to work in the future for the kind of company that employs accountants with a reputation for turning a blind eye? And do you think that sort of company employs accountants from companies that got caught………….

    kilo
    Full Member

    Interesting re the legislation on it,

    Anyone considering taking advantage of the scheme to support their wage bill while employees on furlough are still working needs to understand that asking employees to do any work for the business while on furlough could be either of the following criminal offences:

    Cheating the public revenue, for which the maximum prison sentence is life and an unlimited fine.
    Fraud by false representation, for which the maximum prison sentence is 10 years and an unlimited fine. (https://www.clarkslegal.com/Blog/Post/Caution_and_Integrity_when_Furloughing_Employees_)

    I would have thought HMRC might fancy some easy wins once this all over and pot people who have defrauded the tax payer, bound to be faux media outrage at some point to stoke the fires. Can’t imagine it would be massively difficult to investigate either, as opposed to some VAT fraud for example. As we’ll all be paying for it, the chance to get some of those engaged in criminality might be quite good p.r

    If you’re in anyway engaged in running or administrating the scheme you need to recognise the chance of being investigated, arrested, house searched, etc and the knock on effects of these.

    finephilly
    Free Member

    I would call it in. Inform hmrc. If the company needs to commit fraud to stay in business then its obviously doing something wrong in the first place.

    crazy-legs
    Full Member

    I would have thought HMRC might fancy some easy wins once this all over and pot people who have defrauded the tax payer, bound to be faux media outrage at some point to stoke the fires.

    That’s already there; loads of complaints, comments etc in the press and on social media about how all these people driving to the beach, the National Parks and the druve-thru are basically on a 2-month Government funded holiday.

    Nicely divided nation between the ones who are WFH or still commuting for 100% pay vs the ones sitting around doing nothing for 80% pay.

    Cracking down on that one afterwards will be an easy win politically.

    uwe-r
    Free Member

    My only sad suggestion is I think your company will be gone in the very near future whatever you do. I work in Banking and have some experience of dealing with failing companies – a common theme is that it can be seen coming.

    The government must know there is masses of this going on. Many small firm are likely to do it to some degree and there is a sliding scale of what working from home means. I would imagine your firm will get away with this, possibly even if you flag it.

    chakaping
    Free Member

    Also, have any of the employees refused or expressed their unhappiness?

    I would be very uncomfortable with it myself.

    poolman
    Free Member

    I d report it as you will be found out eventually. It’s fraud they can go back as long they like without limitation. I used to have a client who was a tax specialist, ran his own consultancy defending clients in tax investigations, his advice was just do everything properly or you will be found out.

    A lot of furloughed jobs are zombie jobs, in all but name.

    tonyf1
    Free Member

    I am aware this is illegal

    That’s not going to be defensible position should someone else report this.

    It sounds like you are working for a subsidiary of a larger organisation which will have whistleblowing policies in place. Advice would be to follow that policy and report anonymously if not comfortable. It’s very likely they won’t be aware that employees are being asked to work and get it stopped.

    Sandwich
    Full Member

    That’s already there; loads of complaints, comments etc in the press and on social media about how all these people driving to the beach, the National Parks and the druve-thru are basically on a 2-month Government funded holiday.

    Riding from home, staying local, little driving except for food shopping or deliveries for the isolating. Stay under the radar, don’t draw attention some are too self absorbed to realise when a good thing happens it needs careful tending.

    Sandwich
    Full Member

    OP posting so as you don’t miss this in my ramblings above.

    Report anonymously to the confidential hotline. As others have said you will need a new job but you will have an untarnished record for financial propriety.

    HMRC will be auditing after the schemes finish and they will find the wrongdoing at your employer, there are too many involved for it to be covered up convincingly. (A secret shared is no longer a secret).

    Good luck with your search for an employer with a moral compass (they do exist).

    csb
    Full Member

    Nicely divided nation between the ones who are WFH or still commuting for 100% pay vs the ones sitting around doing nothing for 80% pay.

    Not as black and white as that of course. There is a chunk of society who are on 100% pay, working at home ‘full time’, but also teaching kids. So in reality not really delivering on anything 100%.

    dannyh
    Free Member

    Nightmare scenario and one that I could easily find myself in as I am a qualified accountant too (CIMA, so not ‘proper’ if you get my drift).

    Reading through you are in a vexed situation. Life is pretty good. Work-life balance etc.

    Problem is it sounds like your employer may well go bust anyway. Again, no idea on how the relationship works between you and the sister company. But will the sister company step in any more than they already are?

    I think a highly likely scenario here is that the company goes bust and/or makes redundancies, probably of staff that have been paid 20% less than normal but still expected to work their full hours. Sure work has tailed off, but I bet they’ve still felt the need to be ‘on call’ should something crop up. Presumably they’ve not gone down to a 4 day week?

    The chances are that at least one of these people will shop the company after they lose their job via redundancy or company insolvency.

    That means the focus will fall fairly quickly on HR and Finance. And probably you.

    If you challenge the FD with your concerns in writing and he/she is a nasty piece of work they may well call your bluff and now have the evidence you know about it. Doesn’t take Columbo to see how that could play out.

    I don’t know how quickly the govt will be able check this, but HMRC have years of leeway.

    Thoughts are with you, stuff like this is serious if you regard professional integrity as important.

    Tracey
    Full Member

    Its very clear what a furloughed employee can and cannot do.

    You are between a rock and a hard place but its clear to me what the moral and professional thing to do would be.

    https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme#when-your-employees-are-on-furlough

    Del
    Full Member

    Quite aside from anything else if the company is viable, why aren’t they getting one of the loans made available by the government to see them through? Or have they burned through that already? Why the hell is fraud the answer?
    I’d just get out tbh. Go drive for a supermarket or deliver for the post office with a clear conscience.

    timmys
    Full Member

    Nicely divided nation between the ones who are WFH or still commuting for 100% pay vs the ones sitting around doing nothing for 80% pay.

    Not as black and white as that of course. There is a chunk of society who are on 100% pay, working at home ‘full time’, but also teaching kids. So in reality not really delivering on anything 100%.

    ..or possibly, as is the situation for us and I don’t think is particularity uncommon, two people working 100% hours at home, while looking after two kids, with the cream on top of both having been given salary cuts.

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