The Furlough Scheme and Fraud

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The UK government’s Coronavirus Job Retention Scheme (furlough scheme) has protected the incomes of approximately 9.4 million employees, paying 80% of their monthly earnings up to a maximum of £2,500 per month.

However, a recent study concluded that 63% of those workers had undertaken some work - or work-related training during April and May.

Examples of breaches of the scheme range from the obvious to the subtle – though most employers who breach the rules appear to know they are doing so.

- Requiring employees to work full-time with the employer claiming under the scheme.

- Requiring employees to work part-time while under the scheme. 

- Describing work as “training” or “research” – this is still work.

- Requiring employees to work and describing such work as preparation to return to work.

- Claiming for more employees than they actually have.

- Inflating hours worked and wages for employees.

- Employers claiming, but not passing on the payments to their employees, or passing only part of it.

- Threatening employees with dismissal once the scheme ends if they do not work during the furlough period.

 

Where an employer has made a mistake under the Finance Act 2020, they will have 90 days to inform HMRC – effectively an amnesty period. 

However, HMRC is already investigating almost 1900 tip-offs to their fraud line service. In the most serious and obvious cases, there is unlikely to be any amnesty, with fines and criminal convictions likely.

The Coronavirus Job Retention Scheme is due to end on 31st October.

There is currently no plan to extend the deadline or to introduce an alternative scheme.

 

 

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