When the Coronavirus Job Retention Scheme (CJRS) was announced by Chancellor Rishi Sunak earlier this year, many analysts questioned the ability of HMRC to regulate its implementation and usage, given the mass scale on which it was adopted.
The scheme, which facilitates furloughed staff members receiving 80% of their wages by the taxpayer, which can be up to £2,500 per month, is estimated to have cost the public £19.6billion so far. By the Government’s own analysis at its height, furlough was being used by one-quarter of the UK’s workforce – yet numbers have dropped as lockdown measures continue to ease across the country.
Whilst the vast majority of cases were indeed necessary to save jobs and prevent an employment crisis, previous research carried out by Crossland Employment Solicitors found that 34% of UK employees had been asked by their boss to work while on the scheme – something which was considered an act of fraud under the rules of the CJRS before 'flexible furloughing' came into play from July 1, 2020.
HMRC has now confirmed that the first arrests in connection with alleged furlough fraud have been made. The unnamed man from the West Midlands, according to details obtained by The Revenue, has been arrested in connection with an alleged fraud of the scheme. The report stated that the man was arrested on July 8, in connection with claims of a £495,000 case of abuse.
“The Coronavirus Job Retention Scheme is part of the collective national effort to protect jobs. The vast majority of employers will have used it responsibly, but we will not hesitate to act on reports of abuse of the scheme,” Richard Las, Acting Director of the Fraud Investigation Service at HMRC, told The Express.
“This is taxpayers’ money and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding,” he added.
Now is the time to assess furlough accounts
Joanne Moseley, from the Employment Law Team at Irwin Mitchell, told HR Grapevine that, to ensure that companies don’t face the same investigation, now is the time to make sure that any use of the furlough scheme was financially justified and that all funds are accounted for.
“The Government has issued guidance to help employers repay HMRC if they've overclaimed through the Coronavirus Job Retention Scheme. If you're continuing to claim, you should correct the overpayment in your next claim,” she said.
“But, if you're not planning on making any other claims, you should make a payment to HMRC. Those that do this are likely to avoid fines and other more serious penalties that are being planned where employers have deliberately overclaimed for staff who haven't been furloughed at all, or have been working for part of their normal hours,” she concluded.