According to new figures from HM Revenue and Customs there have been almost 1,900 reports of furlough fraud.
Company Directors Facing 10 Years Imprisonment | Rosenblatt’s Financial Crime Team
Those reports to HM Revenue and Customs come as it is revealed that employees are being furloughed without their knowledge and consent, only discovering upon receipt of 80% of their monthly salary that they have been registered to the scheme. Whereas other employees have been bullied into continuing to work in spite of knowingly being furloughed by their employer.
A spokesperson for HM Revenue and Customs stated:
“We won’t hesitate to take criminal action against the most serious cases”.
It is a criminal offence to make a false representation to HM Revenue and Customs with the intention of obtaining payment under the furlough scheme.
It has been reported that any company director found guilty of abusing the scheme could face up to 10 years in prison and unlimited fines. A similar punishment will be applicable to those that assist an abuse of the scheme.
The Furlough Scheme Explained | Rosenblatt’s Financial Crime Team Explains
In line with advice published by ACAS the government extended the furlough scheme on 12th May until October 2020.
The furlough scheme is where an employee or worker agrees with their employer to stop work temporarily, but remain employed. The employee must agree to this in writing and must not work for their employer during this period.
Employers can claim for up to 80% or £2,500 of each furloughed employee or worker’s usual wages, whichever is lower. The employer can top up furloughed employees’ wages to 100%, but they do not have to.
The scheme is changing on 10th June, as this is the last date employers can put people on furlough for the first time.
From 1st July employers will be able to bring back furloughed employees on a part time basis.
From 1st August, employers will need to start paying the employer’s national insurance and pension contributions.
From 1st September there will be further changes to the scheme, including a reduction to the contribution made by the government to 70% of wages and from 1st October this will go down to 60%.
The furlough scheme will close on 31st October 2020.
Rosenblatt can help
Rosenblatt has a wealth of experience in financial crime and is uniquely placed to support clients’ financial crime needs, from the investigatory stage to trial and defending any court orders made in the interim, as part of criminal proceedings.
