Business fraud checks net €1bn

BUSINESSES and self-employed workers were hit with a record €1bn in fines last year after social charges body Urssaf reinforced its fraud checks.

The group's 1,500 inspectors carried out controls on 37,000 businesses in 2010 as part of a national push against social security fraud, Urssaf reveals in its annual report.

The priority was detecting non-declared work, which accounted for €185m of the €1.02bn recovered last year. The target for 2011 is €190m.

The other penalties related to under-declared work, calculation errors or mistakes made when filing returns to Urssaf.

Urssaf says the increasing number of penalties issued does not mean fraud is getting worse, but that it has become better at detecting it.

The amount recovered is up 10% on the previous year, after the group was given new powers to access information held by banks and utility firms.

Urssaf inspections can be done because of suspicions (due to a tip-off, for example) or at random.

They check the business is properly registered, proper declarations are being made and social security rules followed. Firms are sometimes picked because they match criteria selected for attention in a given year, in terms of size or sector.

Firms are usually given advance warning, though for inspections intended to discover illegal undeclared work (usually following tip-offs), they may be unannounced. They can take from half a day to several weeks, depending on business size.

Urssaf inspectors can ask to see any relevant documents relating to the business. There may be back-payments to make up and there can be late payment penalties.

However in some cases an inspection leads to the discovery that refunds are due. Last year, Urssaf handed back €200m in overpaid social charges.

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