The furlough scheme was launched in March 2020 in an effort to minimise job losses during the coronavirus pandemic. Under the scheme, employees will receive 80% of their wages, up to a total of £2,500 a month, off the government. At its peak in May last year, the furlough scheme was supporting 8.9 million jobs.
The scheme is intended for those who cannot work as a result of national lockdowns and restrictions caused by the pandemic. However, HMRC had received 21,378 reports of suspected furlough fraud by early January.
Some instances of fraud have involved employees who have been asked to work, despite being placed on furlough, whilst other employees have been unaware they have been furloughed, only finding out when they receive 80% of their wages. In more extreme cases, dormant companies are being ‘re-opened’ in order to claim money, under the scheme, for fake employees.
HMRC has warned businesses that penalties and fines could be issued and in severe instances, a criminal investigation may take place. HMRC is urging anyone who suspects furlough fraud to contact them, using their confidential online hotline.