Employers could face up to 10 years in prison for fraudulent furlough

UK businesses, but simultaneously it has also been subject to a significant amount of fraud.

HMRC Chief Executive, Jim Harra stated that while the scheme has saved nearly nine million jobs, it has been a magnet for fraudsters’.

As a result, steps are now being taken to catch and prosecute those going against government guidance.

Furloughing, the Job Retention Scheme and HMRC

The scheme provides employers with wage relief during the pandemic under the strict guideline that employees can’t undertake any work while furloughed.

Nevertheless, HMRC recently revealed that it has received more than 3,000 reports of furlough fraud since April.

Additionally, a recent survey found that more than a third of furloughed employees have been asked to work and 29% have been asked to undertake administrative tasks.

With more than a quarter of the UK workforce furloughed, HMRC must tackle the fraudulent activity.

Prosecution and criminal charges

While there is no trigger to alert HMRC to fraudulent activity, they’re counting on whistleblowing from employees.

Once an employer is reported, it’s incredibly easy for HMRC to cross-check the PAYE system and obtain evidence from the employee.

Those who have unintentionally broken the rule can be made to return the fund but if intent can be proven, employers could face up to 10 years in prison.

Further furlough guidance

As the furlough scheme has been rolled out rapidly, a lot of uncertainty surrounds the guidance.

For added clarity, you can check out our support hub here that outlines all the recent announcements and news regarding the Job Retention Scheme.

Also, all our payroll products now have furloughing functionality as standard, to see our solutions, click here.