Any fraud related to the action of paying an employee is known as ‘payroll fraud’. These can be as simple as an employee claiming to have worked more hours than they actually have (known as ‘timesheet fraud’) or can involve the engagement government schemes (including ‘furlough fraud’).

Because of the rise in payroll fraud owing to the measures introduced during the COVID pandemic, HMRC published new guidance for business to detect the fraud in 2023. You may find it here: https://www.gov.uk/guidance/check-for-signs-of-payroll-company-fraud

Types of payroll fraud:

Outsourcing fraud

• Where a company outsources their payroll to a third-party company who obtain funds from the company however, they do not meet their payroll requirements. Typically, several companies are targeted in quick succession over a short period of time.

Timesheet fraud

• If an employee misrepresents the time they have worked to gain more money than they have earned, this is a fraud. If a business has a timesheet clock, having a colleague ‘clock you in’ when you are not at work is fraudulent. Businesses themselves can also forge fraudulent timesheets to inflate the number of hours worked in a per-hour contract.

‘Ghost employee’ fraud

• Where a company purports to employ an employee who does not exist, this is a ‘ghost employee’ fraud. This is common when businesses invoice for work but also happened during the COVID pandemic, with businesses claiming furlough pay for individuals who were not in the company’s employment.

Expenses fraud

• Where a business or individual claims for items which were either not purchased or were purchased in a manner out of compliance with the expenses policy, this is fraudulent.

Commission fraud

• If an individual falsifies the number of hours they have worked or the items they have produced, this is a fraud of its own, yet if the hours or produced units lead to a commission or bonus, this is known as a ‘commission’ fraud.

Sick pay fraud

• Sometimes, individuals may work multiple simultaneous jobs without notifying the concerned employers. Facing competing demands on their time, the individual may feign sickness to receive sick pay while working another job. This is sick pay fraud.

Classification fraud

• Labelling an employee as a higher rate earning worker or as a freelancer is fraudulent. This is done either to inflate invoice value or to reduce the business’s national insurance or pension obligations.

Failure to prevent fraud

If a business knows suspects that an employee is committing a payroll fraud, there is a duty on the business to take steps to foreclose the fraud or make authorities aware. The penalties for inaction can be harsh.

Criminal liability may result where businesses do not have sufficiently robust procedures to prevent fraud.

At ABV we have decades of experience representing those accused of payroll fraud. We are trusted to achieve the best results in difficult and complicated environments. If you or your business are accused of falsifying any aspect of payroll, it is crucial that you instruct legal representatives before the situation worsens.

What will happen if I am arrested for payroll fraud? 

If you are arrested for this offence, you will be taken to a police station for the purpose of being interviewed under caution. Among other rights you have the right to be represented at this interview by a solicitor free of charge. This is usually a duty solicitor nominated by the police. You also have however the right to nominate a solicitor of your choice. The solicitor will be able to obtain some information from the investigators about why you have been arrested and will be able to discuss this with you and provide you with advice prior to the interview.

ABV Solicitors have expert fraud solicitors able to attend the police station on short notice nationwide.

What should I do if I receive a letter from a crime enforcement agency such as the police, HMRC, FCA or SFO requesting me to contact them to arrange a voluntary interview? 

Upon receipt of such a letter it is critical that you seek the assistance of a solicitor immediately. ABV Solicitors will allocate a specialist fraud solicitor for you and make arrangements on your behalf to liaise with the investigators and facilitate an interview at your convenience.

This will allow sufficient time for you to arrange a face-to-face meeting with a specialist solicitor in advance of any interview so you can be advised, and fully prepared on what to expect.

We are here to fully support you and those concerned during this difficult time. Obtaining immediate legal advice can make all the difference to the outcome of the investigation.

What if I am released under investigation or released on bail for payroll fraud and need a solicitor or wish for a second opinion?

This can be an extremely stressful time for you, your family and your business.

You may have already been interviewed and released on bail or released under investigation. You may have not used a solicitor at all during your interview or are not confident with the solicitor who represented you and require a specialist solicitor with experience in this area.

Whatever the situation, ABV Solicitors have a dedicated team of experts who are experienced in allegations of payroll fraud and who can provide you with sound advice and assistance.

What if I am charged with an offence of payroll fraud?

If you have been charged with payroll fraud you must seek the assistance of a defence specialist immediately. ABV Solicitors have a dedicated Fraud and Financial Crime department consisting of experienced solicitors who are specialists in this field.

ABV Solicitors can provide immediate advice and assistance and assist you during this stressful time.

Restraint Orders and Account Freezing Orders 

Law enforcement agencies such as the police, HMRC, FCA or SFO often use ancillary powers in addition to making arrests and search warrants. These include applying for Restraint Orders or Account Freezing Orders under the Proceeds of Crime Act 2002.

The purpose of this is to prevent those under suspicion to dissipate assets which may have been acquired through the commission of committing offences.

These Orders are draconian and can cause severe disruption to the lives of individuals and those connected to them including their businesses.

ABV Solicitors have a dedicated team of experts within their Fraud and Financial Crime Department who specialise in tackling these Orders.

If any of the above circumstances apply to you or someone you know contact ABV Solicitors Fraud and Financial Crime Department immediately on 0344 587 9996 or visit our website at www.abvsolicitors.co.uk

ABV Solicitors are available 24/7 and offer their professional expertise and assistance nationwide.