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Thousands of employers took advantage of job retention scheme

HMRC have carried out over 12,000 investigations relating to misuse of the Coronavirus Job Retention Scheme (CJRS), the Self-Employment Income Support Scheme (SEISS) and Eat Out to Help Out (EOHO).

Law firm BLM undertook a Freedom of Information request which found the CJRS had the highest number of ongoing investigations at 7,384.

The SEISS scheme had 5,020 HMRC investigations whilst the EOHO scheme had the fewest at 424.

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Julian Cox, partner and employment law specialist at BLM, said if a HR team or an individual employee, believes their employer is fraudulently claiming furlough scheme, HMRC encourages people to come forward anonymously through a digital reporting service.

He told HR magazine: "HMRC have provided assurances that any information will be treated confidentially and statistical reporting will also be anonymised.

“Employees should also be able to rely on protection against unfair dismissal and detrimental treatment under whistleblowing protections, afforded to all employees regardless of their level of seniority or length of service within the organisation, under the relevant provisions of UK employment statute."

However, even with such protections in place, Cox said it can still be difficult for people to face the choice between becoming seemingly complicit in criminal activity, or putting their employment at risk during a turbulent time when many may still feel worried for their jobs due to the pandemic.

"In any case, it is always a sensible first step to engage with considered legal advice before deciding the best course of action to take,” he said. 

In June, HMRC reported that almost £18 billion had so far been paid out under CJRS and £24.5 billion had been paid out under SEISS.

HMRC also disclosed that as of 28 March 2021, five individuals had been arrested in relation to CJRS, and three in relation to EOHO.

Kate Palmer, HR advice director at Peninsula, told HR magazine furlough fraud will have a significant impact on businesses who need the financial support, therefore it is not worth the risk. 

She said: "This HMRC investigation goes to show how serious the government is about clamping down on furlough fraud.

"HMRC has previously expressed that it will take genuine mistakes into consideration which is why the 90-day grace period is so important to save employers from being investigated for fraud."

Palmer said all employers will benefit from taking action quickly by double-checking their claims, even if they believe they have not over claimed, especially as furlough contributions from the government begin to reduce from 1 July 2021.