Reports of ‘Furlough Fraud’ on the rise

27 May 2020

It has been reported that floods of employees are expressing their concern that their employers are fraudulently processing furlough claims. As has been previously noted, HMRC are encouraging employees to report employers who they feel are claiming through the CJRS portal when they should not be.

One of the key conditions of CJRS is that an employee cannot undertake any work for their employer if they have been placed on furlough. Reports from employees suggest that some employers are claiming back via the CJRS when they should not be doing so.

The whistle blowing charity, Protect, has reported that they have seen an influx of claims involving employers exploiting the CJRS, with some asking employees to return to work voluntarily, whilst others claiming CJRS without the employee’s knowledge. When employees have challenged their employers, dismissal and victimisation are just some of the consequences for doing so.

HMRC’s Chief Executive Jim Harra advised “Any scheme like this is a target for organised crime. Any scheme that pays out I’m afraid attracts criminals that want to defraud it and people that are genuinely entitled to it who inflate their claims.”

HMRC positively encourage employees to report any instances where they feel that their employer is not acting in line with the guidance. To assist with this, HMRC set up a dedicated hotline for employees to report employers who are abusing the scheme. In early May, HMRC reported that they were dealing with over 800 reports of abuse to the scheme.

When an employee is furloughed

When an employee is placed on furlough, employers cannot ask that employee to do any work that:

  • Makes money for their employer organisation or any other organisation which is either linked or associated with the organisation that has placed them on furlough

  • Provides a service for their employer organisation or any other organisation which is either linked or associated with the organisation that has placed them on furlough

An employee can however:

  • Take part in training

  • Volunteer for another organisation

  • Take up employment with an organisation (whereby the employment contract allows them)


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