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FRAUD

Man arrested on suspicion of £495,000 furlough fraud

HONG KONG

Hong Kong passes Fund Bill

A West Midlands man has been arrested as part of an HM Revenue and Customs (HMRC) investigation into a suspected £495,000 Coronavirus Job Retention Scheme fraud. HMRC officers executed a search warrant in the Solihull area and arrested the 57 year old. This is the first arrest in connection to alleged fraud relating to the Job Retention Scheme. Computers and other digital devices were seized, and funds held in a bank account relating to his business have been frozen.

Richard Las, Acting Director, Fraud Investigation Service, HMRC, said: “The Coronavirus Job Retention Scheme 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 taxpayer’s money and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding.

“As usual, we have built steps in to prevent mistakes and fraud happening in the first place, but anyone who is concerned that their employer might be abusing the scheme should report it to HMRC online.” Any concerns should be reported at bit.ly/2BYrpzA.

istockphotot:ShaunWilkinson

More than £27.4 billion has been claimed through the Job Retention Scheme supporting 1.1 million employers and 9.4 million furloughed jobs.

The Coronavirus Job Retentioon Scheme has four lines of defence: ● 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 are taken with customers after the money has been paid.

The 57 year old man was also arrested in relation to a suspected multi-million pound tax fraud and alleged money laundering offences. A further eight men from across the West Midlands have also been arrested as part of this linked investigation, which involved the deployment of more than 100 HMRC officers to 11 locations. Further computers and other digital devices were seized, plus business and personal records.

Secretary for Financial Services and the Treasury Christopher Hui welcomed the passage of the Limited Partnership Fund Bill by the Legislative Council.

The new ordinance establishes a limited partnership fund regime which enables funds to be registered in the form of limited partnerships in Hong Kong and will take effect on 31 August.

Mr Hui said that as Hong Kong strives to develop into an international asset and wealth management centre, the new ordinance made impressive strides on this front in attracting investment funds to set up and operate in Hong Kong.

He added this would further promote the city’s private equity market and drive demand for local related professional services, and in turn strengthen Hong Kong’s position as an international financial centre.

The limited partnership fund regime is an opt-in registration scheme administered by the Companies Registry. It is a common constitution form for private funds such as private equity funds.

FINANCIAL REPORTING COUNCIL

FRC announces sanctions against Grant Thornton

The Financial Reporting Council (FRC) has fined Grant Thornton UK LLP £3 million (discounted to £1.95 million for admissions and early disposal) for: (i) firm-wide failures to ensure compliance with ethical standards and requirements between 2014 and 2017; and (ii) the loss of independence in relation to its audit of

Conviviality Retail Plc (the company) for the year ending 30 April 2014 (the audit).

Grant Thornton has also agreed to the following non-financial sanctions: ● a severe reprimand; ● a declaration that the audit did not comply with relevant requirements; and ● a package of measures directed at improving the quality of future audits, comprising: 1. the establishment of an Ethics Board to oversee the firm’s compliance with Ethical Standards and requirements with the Board to provide reports to the FRC for three years; 2. a review of its Ethics Function to identify any skills/resource gaps; 3. increased training to staff on relevant ethical issues; and 4. further improvement to the firm’s policies and procedures to ensure compliance with ethical standards and requirements.

Grant Thornton will also pay £207,000 in respect of Executive Counsel’s costs in the matter.

Claudia Mortimore, Deputy Executive Counsel, said: “It is vital that audit firms comply with ethical standards and requirements and create the necessary culture and control environment so that their people really understand their importance.”

MONEY LAUNDERING

EU refers Austria, Belgium and Netherlands to the European Court of Justice

The European Commission has referred Austria, Belgium and the Netherlands to the Court of Justice of the European Union, with a request for financial sanctions, for failing to fully implement the 4th Anti-Money Laundering Directive into their national law. Executive Vice-President Valdis Dombrovskis said: “We have robust EU rules in place but they must be applied consistently and efficiently. We will make sure that everyone in both private and public sectors applies the rules rigorously. We have launched many infringement procedures to ensure the full transposition and application of our rules.”

IRELAND

Ireland updates guidelines on online tax evasion reports

Tax and Duty Manual “Guidelines on the processing of online tax evasion reports” (see bit.ly/32bdwbL) has been updated as follows: ● Clarification has been added that tax evasion reports (TERs) can be

Following an assessment of the notified measures by these member states, the Commission has concluded that the 4th Anti-Money Laundering Directive has not been fully transposed into national law. The incomplete transposition concerns fundamental aspects of the anti-money laundering framework, such as: ● betting and gambling legislation (Austria); ● mechanisms under which the Financial Intelligence Units exchange documents and information (Belgium); and ● the information to be provided on the beneficial ownership of corporate and other legal entities (Netherlands).

submitted to Revenue anonymously, with the exception of those TERs that are submitted via the MyEnquiries (MyAccount or ROS) services. Updated Revenue “Contact us” links have been included. A new Revenue Anti-drug smuggling email address has been provided where members of the public (and businesses) can submit details of their suspicions of drug smuggling.

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