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Working whilst furloughed? A must read for employers and employees…

25 June 2020

We have recently received an influx of inquiries from employees reporting that their employer is fraudulently claiming money under the Government Job Retention Scheme by making them work whilst furloughed.

From 1st July 2020, the new system of flexible furlough will be introduced under the Coronavirus Job Retention Scheme, allowing furloughed employees to return to work on a part-time basis.

However, under the current layout of the scheme, an employee cannot do work for an employer seeking the reimbursement during furlough, and it cannot ask them to do work for another linked or associated business. Furthermore, an employee can carry out volunteer work, assuming that the volunteering in question is not for the employee's employer and being used to circumvent furlough but receive reimbursement of wages.

An employer who is making an employee work whilst they are furloughed, is likely to be committing fraud and employers should be aware of the following:

  • The government has explicitly identified the right to retrospectively audit all aspects of the scheme with scope to claw back fraudulent or erroneous claims.
  • Draft regulations were published for consultation on 29 May 2020 which would give HMRC the power to raise income tax assessments to recover CJRS payments from recipients who were not entitled to the payments, or where CJRS payments have not been used to pay furloughed employee costs. The draft regulations will give HMRC power to make a company officer jointly and severally liable where the officer has deliberately made a claim to which the company was not entitled. HMRC will also be able to charge penalties in cases of deliberate non-compliance or where a person who has claimed a CJRS payment deliberately does not use it for the costs it was intended to reimburse.

HMRC encourages employees who are concerned that their employer is abusing the scheme by claiming on their behalf and then not paying what they are entitled to report the employer. The report can be made through HMRC's Report fraud to HMRC service.

We also thought we should share with you an interesting article published by the BBC on the topic - Coronavirus: 'My employer broke the furlough rules'

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