Bosses are urging employees to commit ‘furlough fraud’
22 June 2020
It has been widely reported that significant levels of ‘furlough fraud’ have been taking place over the course of the period in which the Coronavirus Job Retention Scheme (CJRS) has been available for businesses to claim grants through the CJRS for employees that they have placed on furlough.
Research carried out by Crossland Employment Solicitors highlights the fact that 34% of employees have been instructed to continue working despite the fact that they have been placed on furlough. 29% were asked to complete administrative tasks while on furlough, and 20% had been told to work for a company linked to the one that had placed them on furlough.
As the government is aware that ‘furlough fraud’ is prevalent, they are giving employers a 30-day period in which to admit that they have made incorrect claims, in draft legislation which will also give HMRC powers to charge penalties for deliberately submitting fraudulent claims.
The rules surrounding the operation of the CJRS from March – June 2020 clearly state that employees must not carry out any work for the employer that has placed them on furlough – however, they may undertake training. They are also permitted to complete volunteering work for, or start work for another employer, if their contract allows.
The research found that the rules were being broken in both small and medium-sized enterprises, and also in larger companies.
An HMRC spokesperson said:
“The Coronavirus Job Retention Scheme is part of the collective national effort to protect jobs. This is taxpayer’s money and fraudulent claims limit our ability to support people and deprive public services of essential funding.
“We’d ask anyone concerned their employer might be abusing the scheme to please contact us. It could be that you’re not being paid what you’re entitled to, they might be asking you to work while you’re on furlough, or they may have claimed for times when you were working.
“We have received 3,858 reports from the public. Reports can be submitted to us entirely anonymously and everything we receive is assessed and a decision made on the most appropriate course of action. We’re not trying to catch people out – if it turns out to be a genuine mistake then we’ll help put it right, and if it’s more serious then we’ll step in.
“These reports are just one way that HMRC identifies fraud. Claims are checked and payments may be withheld or need to be repaid if the claim is based on dishonest or inaccurate information. We won’t hesitate to take criminal action against the most serious cases.”
The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.