Press Releases

News and Events

Businesses warned of consequences for abusing furlough

  • Posted

Businesses in the West Midlands are being warned they will face severe financial penalties if they try to step outside the Government’s furlough scheme.

Leading employment lawyer Sally Morris said there has been a rise in calls to the employment team at mfg Solicitors from worried staff who are being asked to work even though they are meant to be on furlough leave, with the Government paying 80% of their wages.

Ms Morris, partner and head of the firm’s award-winning employment team, said HMRC was prepared to spend the next five or six years investigating potential abuse of the Coronavirus Job Retention Scheme and that it was vital businesses kept detailed records of its use and owned up quickly if mistakes have been made.

The scheme has seen the government use billions of pounds of taxpayers’ money to pay most of the wages of staff who cannot work during the lockdown and social distancing.

However, some employees have reported being required to carry on working and even to lie if questioned by HMRC, using their personal mobile phones, email accounts and laptops or working for cash in hand to avoid detection.

She said: “From July there will be some flexibility in the furlough scheme but it’s still possible that some employers will fraudulently claim the number of days or hours worked by an employee in order to receive more funding.

“This is completely against the law, let alone deeply immoral when such a vast amount of public money is having to be used simply to stop unemployment rocketing beyond levels seen in the worst recessions in history.”

She said enquiries were being received by her team from workers worried about businesses abusing the system.

“Some have told us they might be dismissed if they refuse to work illegally while some have complained of unfavourable treatment due to working part-time or because of their race and sex,” Ms Morris added.

She said employees in these situations might be able to have protection as a whistleblower and could bring a claim of automatic unfair dismissal if they are dismissed or resign. Similarly, employees might be able to bring a discrimination claim.

“Employers thinking they can avoid HMRC are unlikely to win. There is a confidential online HMRC fraud reporting line, HMRC are conducting random audits, as well as investigating businesses who used the scheme and reported unusually high turnover and profits.

“Overall, it’s vital employers keep full and detailed records because HMRC is prepared to spend the next five or six years checking whether the Job Retention Scheme was used correctly.”

Ms Morris warned penalties would be severe but said employers had a 30-day window to notify HMRC and return the money without a penalty if an error has been made.

Businesses needing advice on the furlough scheme can contact Sally through