Viewing 36 posts - 81 through 116 (of 116 total)
  • Employer committing fraud – opinions please
  • jp-t853
    Member

    Firstly don’t stress about your professional standing, you have an FD and you have raised your concerns the buck stops with them.
    Look for other options but not many of us can survive without our salary if you decide to lay low and keep food on the table then life now is a lot less stressful that that alternative.
    This should come out in the wash when you want it to, there is more than enough evidence for HMRC to give a wrap on the knuckles. The company will say oops we made a mistake, very sorry and not much more will be said I expect. There will be thousands of companies doing this so HMRC will be busy. Hopefully the company will be in a position to pay the money back when the time comes.

    Premier Icon RichPenny
    Subscriber

    That is a horrible scenario to be in. Agree with other posters though – the company does not seem likely to survive, especially in the next few months when furlough changes again

    You’ve already pointed out the issue to your manager, who is choosing to ignore it. The way I see it, no benefit to asking again. In your professional role, you’ve been asked to implement furlough, which you’ve done. Your bosses still choosing to assign work is their responsibility, not yours. I don’t know what the rules are as an accountant, you should know if fraudulent activity burdens you with the obligation to report.

    With people being made redundant in a badly handled process, as you say, there will be disgruntled employees. I would think one will be switched on enough and have the motivation to report this.

    So for me, it makes sense to report. I don’t think you’ll be the cause of the business failing; you definitely don’t want to be an accessory to fraud.

    I have the added problem that I am the accountant and am supposed to know stuff like this

    If this is the case I would report it, probably, maybe…..its certainly the right choice

    Premier Icon footflaps
    Subscriber

    Normally I’d say dob them in, but in the current circumstances I’d say don’t bother.

    Given the lock down is driving 1000s of businesses to the wall and the whole point of the furlough money is to try and mitigate the complete collapse of our economy, if your company is abusing the system, so what – the money is there to help companies survive and if it buys your company some months life, then it has surved its purpose.

    If the company folds, then you just have unemployed staff which doesn’t help anyone especially if you’re in a high unemployment area.

    As for professional liability, if you’re an accountant then you know about them company taking the furlough money but unless all the furloughed staff report to you and you’re the one insisting they also work, you can just claim ignorance.

    Premier Icon sadexpunk
    Subscriber

    tough one. couple of things i noted whilst reading through…..

    if they really cant afford to pay the extra 20% to top up your wages, then how could they have paid you 100% of your wages if we werent in these covid days?

    and hence if the company cant afford to not commit fraud to stay afloat, then theyre not long for this world anyway?

    if you dob them in anonymously, then arent you putting yourself at risk as theres no record that its you that has ‘done the right thing’? the company gets reported and you’re still in the sh1t cos youre just as culpable as the directors?

    really difficult position, but i think id find it difficult to be the actual dobber that sent a firm under. i think id veer towards firstly sending an email to bosses asking if theyre aware that what theyre doing is illegal, and that due to your own integrity you will not commit a crime. state that they must decide whether to properly furlough you and you dont do any work (in which case you know nothing about whats going on and are not responsible), or pay you a full wage, in which case it would be your duty as an accountant of integrity, to report any wrongdoings.

    looks like youre doomed whichever way really tho mate. sheesh, its a toughie….

    Premier Icon Richie_B
    Subscriber

    +1 to everything theotherjonv said

    If you do your option 3 it will come back to bite you in a big way. Ignoring fraud until a time that suits you makes you complicit in that fraud, doubly so for an accountant.

    I knew someone in exactly the same position as you in a company which was kept going by some creative ‘loans’ between companies. Even though it was thought up and largely instigated by the MD. It was the accountant and the financial director who ended up doing time when it all fell apart.

    Either blow the whistle or walk, if you want to work in the same field again.

    Like people have said the working while on Furlough is rife. Unfortunately its the smaller companies which will get punished for it because they are easier targets and are less good at covering their tracks

    Premier Icon NewRetroTom
    Subscriber

    Anyone working for this company is a sucker. They want you to continue to work while they pay you 80% of your salary at zero cost to them because they’re getting it from the government?

    I’d have told them to jog on. CJRS is intended to enable companies that have no work for their employees and no income to keep paying them. It is not intended to help companies keep running as normal while saving costs.

    Premier Icon Clover
    Subscriber

    Tough one but +1 for theotherjonv advice.

    On the better things ahead…

    We’ve just had universal proof that people can work from home successfully so the ubiquity of ‘turning up at the office’ jobs will not persist. If you can work remotely and go to nearest city once a week it will not be as terrible as you think.

    I was peremptorily made redundant three years ago and it has turned out well so far. The headspace of not being put in a very uncomfortable situation will help you deal with finding something new and better.

    If you can do accounts and payroll or the dreaded VAT for companies remotely it may well be a service you can offer to a number of small companies. Also have a look at the software out there – I have been trained to keep digital records now using a free package and my accountant has a pretty easy job of slurping the numbers into my tax return every year.

    Just ideas, I just know the feeling of terror of moving from (a perceived but in my case illusory security) but it does pass.

    Ro5ey
    Member

    Horrible situation you find yourself OP, I feel for you…. but you know what the right thing is to do… report.

    I doubt very much HMRC will be smashing the door down monday morning !!

    In fact they may well not investigate for ages or indeed they might compile evidence over time…. that gives you the opportunity to stay employed, while finding another job knowing your arse is covered and you have done the right thing.

    I say this alot but a really do mean it this time

    Good luck

    Premier Icon Sandwich
    Subscriber

    Something from the car retail sector that should help with decision making. Records need to be kept for 5 years sprang out at me.

    https://cardealermagazine.co.uk/publish/penalties-making-furloughed-staff-work/190632

    mefty
    Member

    Footflaps, among others, makes a fair point. Whilst HMRC will no doubt go after some employers I am sure situations such as this will be very common and a long way down the list. Even in normal times, most tax cases like this would be resolved through civil remedies i.e. fines and penalties levied on the company.

    You are not a member of a professional institute so you have no risk of any qualification being taken away or other censure through their internal proceedings. Unless things have changed alot, there are no statutory obligations that you are failing to meet as a “company accountant”, this can be contrasted with the Directors. The one area of potential exposure would be if you are making false declaration on some form of HMRC return.

    Finally, if it comes to the worst and the company goes bust as a result of an HMRC investigation, I cant see this impacting your employablity anymore than being an employee of any company who goes bust. Pretty much every insolvency involves a big unpaid tax bill.

    Premier Icon theotherjonv
    Subscriber

    Big companies won’t be caught by this because they won’t be doing it or will be so good that they’ll be covering themselves.

    Everyone else – if HMRC don’t come a knocking, your auditors will and as someone said further up there, they also have a legal responsibility to identify and correct wrong practices. Unless they’ve got bent auditors too, there’s another potential leakage. Then there’s any disgruntled employee…..

    Premier Icon TiRed
    Subscriber

    I am aware this is illegal and am not comfortable with it.

    You already know the answer. Now you are aware of it, you know what you must do.

    Premier Icon kilo
    Subscriber

    . The one area of potential exposure would be if you are making false declaration on some form of HMRC return.

    A false declaration is the sort of thing that leads to you getting arrested and stuck on for conspiring to defraud, etc. I used to do fraud investigations for HMCE many years ago, we only went for criminal outcomes, obviously things may have changed and this is small beer, but I wouldn’t mess with HMRC and they can also follow up with POCA and civil money chasing, it’s a bit of a gamble.

    Premier Icon RichPenny
    Subscriber

    Given the lock down is driving 1000s of businesses to the wall and the whole point of the furlough money is to try and mitigate the complete collapse of our economy, if your company is abusing the system, so what – the money is there to help companies survive and if it buys your company some months life, then it has surved its purpose.

    The whole point of the furlough money is to support the wages of people who can’t work. There are millions of these people in the UK, widespread abuse of the system simply means it’ll end earlier. There is a whole raft of other measures, such as delayed VAT payments and loans, which are intended to further support businesses. These are what the OP’s company should be using.

    Premier Icon footflaps
    Subscriber

    The whole point of the furlough money is to support the wages of people who can’t work.

    It’s to prevent redundancies. The idea is to help companies cash flow so they might still be in business when its all over, rather than just lay everyone off immediately; which is what they’d have to do without it (and the other measures).

    I also don’t believe that chasing up Furlough abuse is going to be on anyone’s radar; we are heading towards an almighty economic collapse and the only thing that HMG will be doing for the next few years is throwing billions at the economy trying to keep it afloat.

    The Furlough scheme is masking an unemployment level somewhere around 25% (yes some companies could afford not to use it but they are the minority). When they finally start tapering the scheme we are going to see the real unemployment rate rocket to numbers not seen since the 30s.

    Premier Icon RichPenny
    Subscriber

    t’s to prevent redundancies.

    It’s one of a range of measures designed to prevent redundancies. This one is specifically to prevent redundancies where people can’t work. It says this on the Gov website. It was introduced at a time when multiple industries were simply unable to work – hence the not working bit. The other ones are applicable if your employees can work.

    IIRC, when they announced it, it was commonly thought to only apply to those businesses forced to close. This changed, and rightly so IMO, so that businesses who could stay open had some breathing space to make things safer for their employees

    I also don’t believe that chasing up Furlough abuse is going to be on anyone’s radar;

    HMRC have already said it’ll be on theirs, along with other types of dishonesty that are, sadly, pretty common when the shit hits the fan.

    Premier Icon nparker
    Subscriber

    Once this fraud comes to light, and it will, responsibility will be firmly with the Directors. What are they going to throw you under the bus for? You haven’t given advice that it is OK for them to continue asking employees to work when they’re furloughed and as an accountant it wouldn’t be your job to give such advice – that is the job of the company’s legal department or advisors. In short your responsibilities are no more or less than any other employee of the company.

    Personally, I would suggest 2 things:
    1) You seek whistleblowing advice in confidence from somehwere like these people
    2) You know you’re on a sinking ship so don’t wait for the inevitable and allow events to happen outside your control. Make a plan for how you’re going to find the next job and put it into action. You mention not being officially qualified – maybe start some training on that path. There is always demand for accountancy skills – often remotely.

    Premier Icon epicyclo
    Subscriber

    Here’s an analogy for the OP.

    Just imagine you’re on the Titanic just after it’s hit the iceberg.

    Do you listen to reassurance and go and sit in comfort on a deckchair in the security of the afterdeck listening to the sweet music of the orchestra, or do you go for the freezing discomfort of the lifeboat?

    Leave it too long and there’s no lifeboat, just the cold cold waters of the HMRC.

    (And don’t imagine the govt won’t be seeking to recover as much as possible after the fact and looking for villains to make an example off)

    Premier Icon boriselbrus
    Subscriber

    Tell HMRC but use the Rhodesian solution. Ie.tell them in a way which covers your arse, but is so unclear that they won’t know what you are talking about so won’t act.

    https://english.stackexchange.com/questions/435699/meaning-and-etymology-of-the-rhodesia-solution

    Premier Icon Greybeard
    Subscriber

    The company isn’t going to survive whatever you do, so look for a new job now. Report it anonymously, but put a random six digit number in your report so that you can prove it was you if you get caught up in the investigation.

    higgo
    Member

    What happened?

    Premier Icon toby1
    Subscriber

    Is it like lost, there’s no real explanation after all the drama?

    Premier Icon Cougar
    Subscriber

    That would explain Greybeard’s six numbers.

    Premier Icon Trimix
    Subscriber

    The Director rides a bike and read the Thread.

    Premier Icon tomhoward
    Subscriber

    If HMRC come knocking, simply say you were testing their investigative powers.

    5lab
    Member

    I was chatting to someone earlier. They were working from home on full pay and popped into the office to pick something up, bumped into the payroll person who was surprised they were in as she had claimed for that person as furrowed (and the rest of their department). Person I know calls HMRC to report it, is told they dont have a complaints procedure so theres nothing they can do, due to gdpr (nonsence) they couldn’t even verify he had officially been furlowed. Who knows if itll be cleaned up..

    Premier Icon Sandwich
    Subscriber

    I also don’t believe that chasing up Furlough abuse is going to be on anyone’s radar;

    You are very wrong on this! Discussions have started for some teams on how to proceed with furlough checks and enquiries.

    ferrals
    Member

    I also heard hmrc are setting up a specific telephone line for taking calls reporting misuse of furlough.

    Premier Icon chakaping
    Subscriber

    I was chatting to someone earlier. They were working from home on full pay and popped into the office to pick something up, bumped into the payroll person who was surprised they were in as she had claimed for that person as furrowed (and the rest of their department).

    Ooh, that’s a doozy.

    FWIW, I reckon it will get prioritised at some point soon, if only to improve the “optics” as the Gov’t attempts to launch austerity pt2.

    Premier Icon Greybeard
    Subscriber

    Every employer should be sending in PAYE reports to HMRC as a matter of normal routine. If somebody is working from home on full pay, and has also been furloughed, there are going to be obvious inconsistencies.

    Premier Icon stumpyjon
    Subscriber

    Not necessarily if the company is making up the difference, employee may not know and HMRC can’t tell if this is the case.

    jkomo
    Member

    As a professional, will you not lose your registration if you let it happen?
    I’d get advice on this, you could lose a lot more than your job.
    Talk to the MD of the parent company. Record everything.

    Premier Icon Greybeard
    Subscriber

    Not necessarily if the company is making up the difference, employee may not know and HMRC can’t tell if this is the case.

    Sorry, I don’t understand. HMRC manage the furlough scheme, so will know who’s furloughed, and they know how much people are paid through PAYE. Unless the employer is paying the top-up 20% in cash, off the books, nothing on the payslip, which would set alarm bells going with most employees.

    Premier Icon FB-ATB
    Subscriber

    Greybeard
    Sorry, I don’t understand. HMRC manage the furlough scheme, so will know who’s furloughed, and they know how much people are paid through PAYE. Unless the employer is paying the top-up 20% in cash, off the books, nothing on the payslip, which would set alarm bells going with most employees.

    The furlough isn’t being paid by HMRC to employees, it’s given back as a grant to employers. Employees should still be paid by the company at the usual time and at 100% unless they’ve agreed to reduce it. Company then claims back the money from HMRC

    So if Joe Bloggs gets paid £100 pw and is furloughed, he should still be paid £100 on payday by the company and his payslip reflects that.
    Company then claims back £80 from HMRC and sometime later gets £80 back.

    Joe Bloggs won’t see any difference, apart from the fact he’s getting paid to stay at home.

    Premier Icon Greybeard
    Subscriber

    @FB-ATB – thanks, I was thinking the employee only received 80% if furloughed. If they get 100% there’s no obvious mismatch.

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