Published On: Mon, Aug 3rd, 2020

Furlough fraud: Reports surge but HMRC warns of consequences | Personal Finance | Finance

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Furlough fraud reports have unfortunately been rising as unscrupulous employers attempt to exploit the scheme ended to help Britons. Furlough, or the Coronavirus Job Retention Scheme (CJRS), was implemented by the government to help those who would have otherwise been out of work as a result of the lockdown crisis. From March, the government covered 80 percent of workers’ wages up to £2,500 alongside National Insurance and pension contributions to assist employers and employees. 

However, under furlough there are a number of stipulations employers must adhere to.

Those who are on furlough fraud were not permitted to work for the company that had placed them on leave.

It was only recently that relaxation of the rules meant employers were able to bring back staff on a part time basis – with full pay for the time they spend at work. 

Some companies, however, have exploited the scheme, forcing their workers to come in, or not informing people they are on furlough until individuals received a reduced pay check.

READ MORE: Unemployment spike expected to be ‘short-lived’ across the UK

From this month, employers will take on further financial responsibilities, now meeting National Insurance and pension contributions of their workers.

The government will, this month, continue to pay 80 percent of wages up to £2,500, but this will reduce in the coming months.

The scheme will end in October, with the government refusing to budge on an extension.

Furlough fraud is, nonetheless, something which continues to be an issue for the Revenue.

Speaking to in July, leading tax barrister Patrick Cannon explained his belief HMRC would be cracking down harder on unscrupulous employees even after the scheme ends. 

He said: “HMRC will definitely be pursuing cases. I believe there will be a lot of routine enquiries opened into payments even after the scheme ends.

“I anticipate there will be random checks on companies, asking them to send over information relevant to a business and furloughing. If that gives cause for suspicion, they will be following that up.

“Six to 12 months down the line, it will really come home to roost how much money has been paid out, and it will be easy for the government and HMRC to fall into the mindset of raking back as much money as possible paid in breach of the rules. 

“It is money for old rope – if they have clear cases of furlough fraud then it is going to be straightforward to get it back.”

Where Britons believe their company has been complicit in furlough fraud, whistleblowing organisations have encouraged people to raise the issue internally first.

If they are unsatisfied, they can progress a complaint to HMRC’s furlough fraud hotline.

The service is entirely anonymous and helps the body to trace fraud and punish those who are being dishonest or inaccurate. 

HMRC has been contacted for comment.

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