personal finance

Furlough fraud warning: HMRC likely to crack down after scheme ends – ‘money for old rope’

Furlough fraud involves the exploitation of the government’s Job Retention Scheme for unscrupulous purposes. There have been thousands of reports to HMRC of companies breaking the rules laid out by the government to protect workers across the UK. Under original rules, employees were not permitted to work for their employer while on furlough.

Mr Cannon said: “HMRC will definitely be pursuing cases. I believe there will be a lot of routine enquiries opened into payments even after the scheme ends.

“I anticipate there will be random checks on companies, asking them to send over information relevant to a business and furloughing. If that gives cause for suspicion, they will be following that up.”

Mr Cannon highlighted that in the “heady days” of March and April, the Treasury was focused on making sure everyone received the financial support they needed.

However, the cost of this was significant, and may have been streamlined with more time.

He added: “Six to 12 months down the line, it will really come home to roost how much money has been paid out. 

“It will then be easy for the government and HMRC to fall into the mindset of raking as much money back as possible paid in breach of the rules.

“It is money for old rope – if they have clear cases of furlough fraud then it is going to be straightforward to get it back.”

When the scheme ends in October, it is anticipated HMRC will be evaluating as many claims as possible which it could legally claim money back from. 

Companies who have been bending the rules, then, should be aware that the consequences are likely to follow them around. 

Mr Cannon concluded: “There is an old saying: ‘The Lord giveth and the Lord taketh away’. But I think there is going to be a lot of taking away by Christmas when the penny drops as to what dire straits the country is in economically.”

Where Britons believe their company has been complicit in furlough fraud, whistleblowing organisations have encouraged people to raise the issue internally first.

If they are unsatisfied, they can progress a complaint to HMRC’s furlough fraud hotline – where reports are treated as confidential. 


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