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During the Coronavirus (COVID 19) crisis, the national debt has risen significantly as the Government has had to borrow huge sums of money to protect people’s livelihoods, businesses, and health.
The first national lockdown ordered by the government on 23 March 2020 plunged the country into its deepest recession for three hundred years and, while each subsequent national lockdown didn’t cause quite as much economic damage, they certainly helped to prevent a quicker recovery.
In this article, Black and White will run through the most common types of fraudulent activities related to Coronavirus-related schemes.
As you’ve seen in the news, HMRC and the government now have the job of raising as much money as quickly as possible to pay back the hundreds of billions of pounds borrowed during the crisis. They’re going to be doing this in two different ways:
- they’ll be raising corporation tax to 25% over the course of this Parliament and
- they’re going to be aggressively pursuing individuals and companies whose use of Coronavirus-related schemes could be considered fraudulent.
In addition, scammers are still out there looking to exploit vulnerable individuals’ and company owners’ fears for their own benefit.
We’ll look at the best ways to protect yourself against these frauds and what to do if you become a victim of one.
Coronavirus (COVID 19) Company Scams
Job Retention Scheme (Furlough)
Recently, the government reported that the number of employees working for business claiming furlough support was expected to reach 4.7m at the end of January 2021.
For a staff member to receive payment of 80% of their wages (not including tax and NI payments), they can do no work for your business which is productive. Employers are forbidden from asking staff members to work but staff can participate in training or volunteering.
You are also not allowed to ask staff to take a 20% reduction in their pay nor ask them to work as volunteers for your company.
Self-Employment Income Support Scheme
Under the third wave of the Self-Employment Income Support Scheme (SEISS), the self-employed are entitled to receive a grant of up to 80% of three months’ average profits subject to a maximum of £7,500. Rules varied with the first and second grants and the details of the fourth grant are yet to be published.
In October 2020, HMRC wrote to 24,000 people who they believe were falsely claiming the support. It is likely that the number of people under investigation suspected of making fraudulent claims will increase substantially in the coming years.
Statutory Sick Pay Support Scheme for Employers
Staff who are sick or who have been forced to isolate themselves can now obtain an online isolation note as evidence that they are unable to attend work. The Statutory Sick Pay scheme has been subject to many revisions during the pandemic.
You’ll need to retain records for three years and, if you have made a wrongful claim, the penalty is £3,000.
Eat Out To Help Out Scheme
In August 2020, the Eat Out To Help Out Scheme was launched. 84,000 restaurants took up the offer which allowed them to subsidise the meals they offered to their customers on Mondays, Tuesdays, and Wednesdays.
HMRC have since sent letters to 4,000 restaurants announcing their intention to begin compliance checks. You need to make sure that your records are up to date and that the claims you made pertained to actual takings during the scheme and not on the information HMRC holds about your historic trading patterns.
Reporting Coronavirus Relief Scheme Fraud to HMRC
If your business did not follow one or more of these rules above, HMRC may consider this behaviour as fraudulent. If you are concerned about that and want to speak with us in confidence, please call us on 0800 140 464.
On 13 October 2020, a press release appeared on gov.uk announcing the launch of a new national hotline to report Coronavirus (COVID 19)-related fraud in association with Crimestoppers.
Citizens are asked to get in touch with the fraud reporting hotline by calling 0800 587 5030. All calls are confidential. They are seeking information on cold calling schemes being pushed by criminals offering money from the government related to the Coronavirus (COVID 19) as well as details of any unusual patterns or instances of expenditure you’ve noticed during the pandemic by companies and individuals.
Protecting Yourself From Scammers
The crisis presented a once-in-a-lifetime opportunity for scammers to target people whose lives had undergone severe disruption which many psychologist believed made individuals more vulnerable and suggestible. In fact to date, according to Citizens Advice, one in three Britons were targeted by a scammer during lockdown.
How should business owners and individuals protect themselves?
Take the scam test
Scammers are inventive and resourceful. They are always finding new ways to approach and dupe victims out of their personal details and bank details whether over the phone, face-to-face at your door, via social media, by text message, or sent online via email.
They will often present themselves as figures of authority either working for your local council, working in the security department of your bank, officers at the “refunds team” or the “investigations team” within HMRC, and so on.
To check whether the advice you’re being offered or the actions you’re being asked to take will put you at personal or financial risk, take the “scam” test to root out fraudsters:
- “S“- it seems too good to be true
- “C” – you receive a phone call, email, or text message without warning from someone purporting to work for the government, the local council, or your bank. Emails and text messages will nearly always contain a link (or links) to a website into which you’ll be asked to enter your personal information and financial information to receive your “refund” or “grant” or make payment for the “fine” you’ve incurred.
- A” – you’d being asked for detailed personal information and financial information including your National Insurance number, home address (or office address), personal details, bank details, or credit/debit card details. Remember that on a genuine call or email from HMRC, the banks, and your local council, they will never ask anyone for sensitive information.
- “M” – they want you to give them your money
If in doubt, don’t give them the time of day.
Always stop the conversation or delete the email or text message and report it to Action Fraud by calling 0300 123 2040 or clicking here to file an online report.
Coronavirus (COVID 19) email scams to watch out for
HMRC have recently become aware of an email scam circulating inviting self-employed people and company owners to apply for a grant “for the third wave” containing links to a bogus HMRC website address. There is no such scheme and the public is being asked to forward the email to Action Fraud immediately.
Text messages – scams to watch out for
“COVID-19 refund” text message scams
The “COVID-19 refund” SMS scam is similar to the email scam above – it also contains a link to a fraudulent website and the public is being asked to send reports of scammers’ attempts to deceive them to Action Fraud immediately.
“New lockdown support plan” text message scams
The typical “new lockdown support plan” SMS scam states that HMRC are offering to give you a tax refund (the amount of which is included in the text) and this also contains a link to a fraudulent HMRC website. Again, this is a scam and you should report it to Action Fraud as soon as possible.
Stopping yourself or your company becoming a victim of COVID scams
The two major warning signs that a scammer has got into contact with you are:
- you feel hurried – whenever you receive a text message, phone call, or visit to your home or business premises from someone claiming to be from the government, HMRC, the local council, or a supplier you use and they want you to act quickly, stop. Get in touch with the organisation direct if you’re not certain and check to see that it is actually them who are in touch with you. Make sure you use the contact details contained on the website of the organisation rather than the contact details on any website potential fraudsters link you to.
- you’re being asked for something personal – your bank, the government, or a shopping website you use will never ask members of the public or their customers to transfer money over the phone or online to a new account, or (part of) your PIN code, request money for a “free gift” or “admin fee”, threaten to arrest you, or for remote access to your PC.
What should you do if you’ve been scammed?
If you suspect that an interaction you’re having is fake, stop it straight away.
If you have given bank or card details to a fraudster, let your bank or building society know about it straight away.
To protect yourself against online scams, you should consider installing anti-virus software to ensure that the security on your desktop, tablet, or phone is completely up to date.
Support on Coronavirus Scheme Claims
For the latest information on coronavirus relief schemes, please get in touch with Black and White Accounting. Why not sign up to our newsletter using the link below, or follow us across Facebook, Instagram, LinkedIn, Twitter and YouTube.
If you have any pending claims with HMRC or you’d like to start claiming under these schemes but you’re not sure what to do, please give us a call. We’re here to help you through this unprecedented time and to ensure that your business is stable, resilient, and profitable when things return to normal.
To find out more, please get in touch with us today, by contacting Black and White Chartered Certified Accountants, populating the “Got a Question” form on the right, or calling us on 0800 140 464.
