Furlough fraud: How to spot if your employer is ‘deceiving taxpayers’ with the scheme

Furlough was implemented by the government as part of efforts to assist those who may have otherwise been left out of work. The government currently covers 80 percent of workers’ wages up to £2,500 per month, but there are a variety of stipulations which employers must adhere to.


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Included is the fact that employees must not work for their employer during their furlough period.

However, the whistleblowing charity, Protect, has revealed it has seen an increase in claims of employers exploiting the scheme.

According to the charity, more than a third of all coronavirus-related calls since the start of the outbreak were to report so-called ‘furlough fraud’.

One case involved workers being asked to come back to the company to work as a volunteer.

When the issue was raised by an employee, the company concerned suggested they took legal advice to ensure the arrangements were legitimate.

In other instances, the charity stated, some companies were furloughing staff still working without their knowledge.

Of the calls made to the Protect charity concerning the issue of furlough fraud, more than a quarter were from the hospitality sector.

And nearly a fifth of calls of this sort came from retail staff.

However, the charity has sent a warning as it has noted dismissal and victimisation when employees threaten to blow the whistle on furlough fraud.

Case studies from the organisation showed workers being threatened with dismissal, and actual redundancies as a result of speaking out. 

Liz Gardiner, chief executive of Protect, said: “People have simply been told to work despite being furloughed and they obviously feel uncomfortable about this as it’s wrong – it is deceiving taxpayers out of money.

“We’ve also heard from people who didn’t know they’d been furloughed until they got 80 per cent of pay for doing their usual work.”

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To tackle the issue, Protect says employees should first check the guidelines to ensure rules are being followed.

Subsequently, they should move to raise the concerns internally, before raising these externally if there is an ongoing issue. 

Earlier in May, HMRC stated it was dealing with nearly 800 reports of people defrauding the furlough scheme.

The chief executive of HMRC, Jim Harra, previously stated it was likely fraudsters would target the scheme, businesses and organised crime included.

Speaking to the Treasury select committee at the time, Mr Harra said: “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. We have to get a scheme set up rapidly and time has been the enemy of perfection in this.

“We believe we are striking the right balance protecting the exchequer from abuse and the imperative to get help out to those that need it as fast as we possibly can.”

HMRC has urged people to report issues of fraud through its online reporting service.

The service is entirely anonymous and helps the body to trace fraud and punish those who are being dishonest or inaccurate. 

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