HMRC confirms first arrest in connection with furlough fraud

HM Revenue & Customs (HMRC) has revealed that a 57-year-old man from Solihull in the West Midlands was arrested on 8 July on suspicion of a £495,000 furlough fraud relating to claims from the Coronavirus Job Retention Scheme (CJRS).

HMRC says he is the first person to have been arrested in connection with fraudulent claims from the scheme.

As of 12 July, more than £28.7 billion had been claimed from the scheme by 1.2 million employers in respect of 9.4 million jobs.

HMRC says that the CJRS has four lines of defence against fraud, which it describes as:

  • Employees have to have been on a payroll on or before 19 March – preventing the use of fake employees
  • Claims are only accepted from employers known – and authenticated – by HMRC
  • All claims are assessed by a specialist team within a 72-hour window
  • Proportionate and reasonable interventions with customers after money has been paid.

Richard Las, the Acting Director at HMRC’s Fraud Investigation Service, said: “The CJRS is part of the collective national effort to protect jobs. The vast majority of employers will have used the CJRS responsibly, but we will not hesitate to act on reports of abuse of the scheme.

“This is taxpayers’ money and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding.”

He called on people to report suspected furlough fraud via HMRC’s online fraud reporting page here.

Coronavirus apprenticeships guidance updated

Updated guidance from the Department for Education on apprenticeships during the Coronavirus crisis has been published and contains a number of announcements relating to employment arrangements for apprentices.

These updates include confirmation that:

  • Apprentices aged 19 and older can begin to resume on-site training;
  • Apprentices who are made redundant but continue their study element can claim Universal Credit if they meet all eligibility criteria;
  • A dedicated service for redundant apprentices will be launched shortly; and
  • Temporary flexibility suspending the requirement that level two apprentices study and attempt level two functional skills assessment has been extended until 31 December 2020.

Full details of these updates can be read here.

The announcements come shortly after the Chancellor announced additional funding for apprenticeships at the Summer Economic Update on Wednesday 8 July 2020.

The apprenticeships funding will provide £2,000 to employers in England for every apprentice hired under the age of 25 and £1,500 for each newly-hired apprentice aged 25 or older.

The new funding is in addition to schemes already in place to support employers in taking on apprentices.

Government publishes detailed guidance on SDLT holiday

During his Plan for Jobs announcement, Chancellor Rishi Sunak issued guidance for a temporary eight month cut in Stamp Duty Land Tax (SDLT) that ensures there is not a charge on ‘any’ residential property transactions with a value under £500,000.

The Government has achieved this by immediately lifting the lower SDLT nil rate band from £125,000 to £500,000, which it claims will mean that nine out of 10 main home buyers will not pay SDLT until the thresholds revert in March 2021 to their previous levels.

In its latest guidance, the Government has confirmed that the SDLT holiday only relates to residential property transactions up to £500,000 – above which the original rates continue to apply.

The guidance also confirms that the additional homes surcharge of three per cent will continue to be charged.

However, this applies across the newly outlined threshold meaning that those subject to the surcharge will now pay three per cent on the first £500,000, rather than the first £125,000, which represents a significant discount on the previous SDLT rate.

Companies also benefit from this increase to the threshold, including businesses that buy residential property of any value above £500,000 where they meet the relief conditions from the corporate 15 per cent SDLT charge.

The nil rate band which applies to the ‘net present value’ of any rents payable for residential property on new leasehold sales and transfers is also increased to £500,000.

To help you visualise what this change means, we have prepared a helpful table below:

SDLT Holiday – First Time Buyer Rates SDLT Holiday – Non-First Time Buyer Rates (no additional properties) SDLT Holiday – Additional Homes Buyer Rates
£0 – £500,000 – 0% £0 – £500,000 – 0% £0 – £500,000 – 3%
£500,001 –£925,000 – 5% £500,001 –£925,000 – 5% £500,001 –£925,000 – 8%
£925,001 – £1.5 million – 10% £925,001 – £1.5 million – 10% £925,001 – £1.5 million – 13%
£1.5m+ – 12% £1.5m+ – 12% £1.5m+ – 15%

On the 1 April 2021, the reduced rates shown in the above tables will revert to the normal rates of SDLT that were in place prior to 8 July 2020.

England to make face coverings compulsory in shops

From 24 July 2020 it will be a legal requirement to wear a face covering, such as a mask, in shops and supermarkets in England.

The move will be enforced by the police via fines of up to £100, which will be reduced to £50 if the fine is paid within 14 days.

The move also allows shops to refuse entry to a customer who is not complying with the requirement to wear a face covering.

Children under 11 and those with certain disabilities will be exempt from the new rule, however, members of the public of all ages have been advised to wear coverings in enclosed public spaces since May.

The move comes after data showed that the death rate of sales and retail assistants is 75 per cent higher amongst men and 60 per cent higher amongst women than in the general population.

While many employers in the retail sector have taken steps to protect employees, such as providing PPE, offering contactless payments and installing screens, it is thought that the new measures will offer additional safety and security to retail workers and customers.

At the moment, it is only compulsory to wear face coverings on public transport in England, but other nations such as Scotland, Spain and Germany already have rules on face coverings in shops.

Summer Economic Update

The Chancellor’s speech, billed as a ‘Summer Economic Update’, has outlined the second phase in the Government’s economic response to the crisis. Within his announcement Rishi Sunak revealed a number of new measures that would seek to protect, create and support jobs.

However, the impact of the Government’s latest measures are likely to have a far-wider impact on certain sectors as they attempt to rebuild and recover following months of restrictions and challenges.

To help you understand the impact of the Summer Economic update on your personal and businesses affairs we have prepared a helpful summary:

Stamp Duty Land Tax Holiday

The Chancellor has placed the property and construction sectors at the core of his measures designed to create jobs. To get these sectors moving again he has announced a temporary cut to Stamp Duty Land Tax (SDLT) by raising the nil-rate band from £125,000 to £500,000 from now until 31 March 2021.

The Treasury estimates that, as a consequence, around nine in 10 people buying a main residence will pay no SDLT.

Staying with the focus on housing, the Chancellor announced a £2 billion Green Homes Grant for homeowners and landlords, covering two-thirds of the cost, up to a cap of £5,000 per household, towards making homes more energy-efficient, with more for low-income households.

These measures came in addition to £5 billion of infrastructure spending announced a week earlier by the Prime Minister and came on top of various other measures targeted at the housing and construction sectors.

Coronavirus Job Retention Scheme and Job Retention Bonus

The Chancellor has confirmed that the Coronavirus Job Retention Scheme (CJRS) will close, as planned, at the end of October, arguing that “leaving the furlough scheme open forever gives people false hope that it will always be possible to return to the jobs they had before”.

The scheme currently offers employers grants worth 80 per cent of a furloughed employee’s usual salary up to a cap of £2,500 a month plus the associated Employer National Insurance Contributions (NICs) and minimum automatic enrolment pension contributions.

Furloughed employees will be paid 80 per cent of their usual pay up to a cap of £2,500 a month until the end of the scheme in October and, since the beginning of July have been able to return to work part-time, with employers claiming a grant only in respect of usual hours not worked.

The Chancellor’s announcement confirms that grants from the scheme will cease to cover Employer National Insurance Contributions (NICs) and minimum automatic enrolment pension contributions from August. In September, the value of grants will fall to 70 per cent of usual wages up to £2,187.50 a month with employers making up 10 per cent.

Finally, in October, the grant will fall to 60 per cent of usual wages up to £1,875 a month, with employers expected to make up 20 per cent.

Many employers fear that they may need to make redundancies as a result of the changes to the CJRS. However, the Chancellor looked to cushion the blow with the announcement of a Job Retention Bonus. The new scheme will see the taxpayer give employers £1,000 for each previously furloughed employee they retain and keep in employment until January, as long as they are paid at least £520 a month. Further details of the scheme are expected later in July.

The current CJRS scheme and the Job Retention Bonus may require employers to review existing arrangements with their staff to ensure they are compliant.

Kickstart Scheme and measures to help people find work

The Chancellor has announced the Kickstart Scheme, which will provide £2 billion to support the creation of “high quality” six-month work placements for 16 to 24 year-olds on Universal Credit and at risk of long-term unemployment.

The Government will provide employers that offer the placements with funding equivalent to 100 per cent of the relevant level of the National Minimum Wage (NMW) for 25 hours a week. It will also cover the associated Employer NICs and minimum automatic enrolment pension contributions.

Outlining further plans to support people in finding jobs, the Chancellor confirmed 10 additional measures, including funding for traineeships and apprenticeships, as well as funding for several careers and job-finding programmes.

The apprenticeships funding will provide £2,000 to employers in England for every apprentice hired under the age of 25 and £1,500 for each newly hired apprentice aged 25 or older. This funding is in addition to schemes already in place to support employers in taking on apprentices.

Here to help

In light of the Government’s latest measures it is important that you review your current legal affairs so that you can take full advantage of what is on offer.

To find out how we can help you with these and other COVID-19 related matters, please speak to our team.

A full summary of the Government’s measures can be found at Plan for Jobs.

Webinar – Pensions and financial planning on divorce

OGR Stock Denton LLP would like to invite you to join our live webinar on Pensions and financial planning on divorce – the impact of COVID-19 

4.30pm, Tuesday 14th July 2020

Zoom webinars

This timely webinar considers the impact of the COVID-19 disruption on divorce settlements already reached, those that are being negotiated now, and what to look for in the new landscape when society returns to a new “normal”.

Chaired and co-hosted by Graeme Fraser, Head of Family and Partner at OGR Stock Denton LLP, this webinar combines analysis and application of legal principles against the backdrop of changing markets.

Guest speaker Mark Penston Bsc AFPS, Chartered Financial Planner with Bluesky and accredited specialist Resolution member sets out tips and potential pitfalls for pensions and financial planning at a time when trusted advice has never been needed more.

If you would like to join this webinar, please email Ali Kabani:

akabani@ogrstockdenton.com

 020 8349 5514

Employers given 30 days to confess to furlough fraud

Employers will be given 30 days to ‘confess’ to furlough abuses, with legislation being fast-tracked to allow HM Revenue & Customs (HMRC) to reclaim any furlough grant that is overpaid to employers, or that is not spent on wages as intended.

More than 2000 employers have already been accused of furlough fraud by whistle-blowers, with HMRC expected to follow up targeted investigations with random compliance checks.

The draft legislation mentions ‘deliberately’ making an incorrect claim or ‘deliberately’ not using the money to pay furloughed employee costs, which should give some reassurance to any businesses that may have inadvertently submitted a claim incorrectly.

The recent update to the Coronavirus Job Retention Scheme (CJRS) also stated that the claims portal will allow employers to declare mistakes made in previous claims, and offset the over-claim against their next claim.

Guidance to the CJRS has been updated by the Government regularly, but it has always been made clear that if employers are using the scheme, then the furloughed employee must not do any work for them, which remains the case until the new Flexible Furlough rules are introduced on 1 July.

If an employer has asked an employee to carry out any work, then they will need to prove that whatever they asked them to do was neither;

  • Making money for them or any other businesses that may be linked, or;
  • Providing services to them

HMRC may find it difficult to determine the employers who have submitted inaccurate claims accidentally, through negligence or a misjudgement.

This is why it is important that all employers that have used the CJRS now review the claims that they have made to ensure that they have submitted the correct claims for each individual.

Government publishes new ‘Covid Secure’ guidance

The Government has published new ‘Covid Secure’ guidance following the announcement that businesses in England including pubs, bars, restaurants, hair salons, barbers, hotels and bed and breakfasts may reopen from 4 July 2020.

The latest documents, prepared by the Department for Business, Energy and Industrial Strategy (BEIS) with input from the devolved administrations in Wales, Scotland and Northern Ireland, cover the following workplaces and working arrangements:

  • Close contact services, such as hairdressers, barbers, beauticians, tattooists, sports and massage therapists, dress fitters, tailors and fashion designers;
  • Hotels and other guest accommodation;
  • Restaurants, pubs, bars and takeaway services;
  • The visitor economy, such as indoor and outdoor attractions, business events and consumer shows.

Amongst the most eye-catching specific measures contained in the new guidance documents are:

  • Keeping a temporary record of customers and visitors in restaurants, pubs, bars and takeaway venues for 21 days;
  • Encouraging the use of apps for ordering;
  • Implementing staggered entry times to hospitality venues;
  • Reconfiguring seating arrangements and introducing one-way systems around hospitality venues;
  • A prohibition of live music and comedy;
  • Barbers and hairdressers should wear plastic visors when working in close proximity to clients.

The new documents add to those published in May, some of which have been updated to reflect the changed one metre plus social distancing guidance:

  • Construction and outdoor work
  • Factories, plants and warehouses
  • Homes
  • Labs and research facilities
  • Offices and contact centres
  • Shops and branches
  • Vehicles

The existing guidance documents and the new guidance documents for sectors reopening on 4 July are based on the following five principles, which have been tweaked since they were first published:

  1. Carry out a COVID-19 risk assessment

Before restarting work you should ensure the safety of the workplace by:

  • carrying out a risk assessment in line with the HSE guidance
  • consulting with your workers or trade unions
  • sharing the results of the risk assessment with your workforce and on your website
  1. Develop cleaning, handwashing and hygiene procedures

You should increase the frequency of handwashing and surface cleaning by:

  • encouraging people to follow the guidance on hand washing and hygiene
  • providing hand sanitiser around the workplace, in addition to washrooms
  • frequently cleaning and disinfecting objects and surfaces that are touched regularly
  • enhancing cleaning for busy areas
  • setting clear use and cleaning guidance for toilets
  • providing hand drying facilities – either paper towels or electrical dryers
  1. Help people to work from home

You should take all reasonable steps to help people work from home by:

  • discussing home working arrangements
  • ensuring they have the right equipment, for example remote access to work systems
  • including them in all necessary communications
  • looking after their physical and mental wellbeing
  1. Maintain 2m social distancing, where possible

Where possible, you should maintain 2m between people by:

  • putting up signs to remind workers and visitors of social distancing guidance
  • avoiding sharing workstations
  • using floor tape or paint to mark areas to help people keep to a 2m distance
  • arranging one-way traffic through the workplace if possible
  • switching to seeing visitors by appointment only if possible
  1. Where people cannot be 2m apart, manage transmission risk

Where it’s not possible for people to be 2m apart, you should do everything practical to manage the transmission risk by:

  • considering whether an activity needs to continue for the business to operate
  • keeping the activity time involved as short as possible
  • using screens or barriers to separate people from each other
  • using back-to-back or side-to-side working whenever possible
  • staggering arrival and departure times
  • reducing the number of people each person has contact with by using ‘fixed teams or partnering’

Businesses and organisations with more than 50 employees reopening from 4 July, and those already open, are expected to publish their risk assessments online, while all employers are expected to display a signed poster, which can be downloaded with the guidance here: Staying COVID-19 Secure in 2020. This includes contact details for the Health and Safety Executive.

The guidance documents relate to workplaces rather than sectors, meaning employers may need to have regard to more than one set of guidance in their risk assessments and reopening plans.

For instance, the guidance for close contact services, vehicles and working in other people’s homes could be relevant to a mobile hairdressing service.

Download our Coronavirus support for business timeline

Since the beginning of the Coronavirus outbreak in the UK, the Government has announced numerous schemes to support employers and businesses.

Several of these schemes are winding down or changing in the coming months, so we have created a handy grid showing what support is available and the deadlines for accessing it.

Contact us today for advice on using the schemes available.

Employees returning from parental leave continue to be eligible for furlough scheme

Employees returning from statutory maternity and paternity leave in the next few months will remain eligible for furlough through the Coronavirus Job Retention Scheme (CJRS).

Since 10 June, it has no longer been possible to furlough an employee for the first time, with the Government set to introduce part-time furlough from 1 July onwards. To facilitate this, the scheme will only be available to employers that are using the CJRS and employees that have previously been furloughed.

Because workers must complete 21 days of furlough to be eligible for part-time furlough, this means that the cut-off date for employees to be placed on furlough leave was Wednesday 10 June.

However, employees returning from parental leave will be eligible for the CJRS as they return to work, with further details set to be announced by the Government imminently.

The CJRS has helped more than one million employers so far, with more than one quarter of the UK workforce being furloughed.

Rishi Sunak, Chancellor of the Exchequer, said: “When I announced these changes to the furlough scheme last month, I was clear that we wanted to do this in a fair way, that supports people back to work as the country begins to re-open following coronavirus.

“But for parents returning from leave, their circumstances has meant that they are still in need of support, and I’m pleased that they will be able to receive the financial assistance they and their family will need.”