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Did You Misunderstand The Furlough Rules? - Jarmans Solicitors

Did You Misunderstand The Furlough Rules?

June 22, 2022 jarmans 0 Comments

March and April 2020 were difficult and complicated times for employers. Lockdown had been introduced and with it the rapidly formulated Job Retention Scheme (also known as Furlough). The implementation was so quick, that it is now coming to light that some employers may have inadvertently misused it, although there may have also been incidences of genuine abuse. 

As a result, the government is currently fast-tracking legislation through parliament that will address potential misuse issues. Additionally, an information notice has been published which states that Covid-19 support payments are subject to tax and that HMRC will have the power to raise tax assessments against individuals whom they believe may have received fraudulent payments. 

The furlough scheme was devised to ensure that businesses and individuals didn’t experience financial hardship during the lockdown and was also designed to halt a potentially dramatic rise in redundancies. Furloughed workers were initially paid 80% of their income but could not work for their employer whilst in receipt of payments. In the early days of lockdown, some employers found it difficult to understand the full terms and conditions. As a result, there were instances where furloughed staff were asked to cover for absent staff or complete tasks at home. Instances like this would be counted as furlough fraud. 

It appears that HMRC are aware that there was some confusion over the initial guidelines and the draft legislation provides a 30-day amnesty for any employer who believes that they have accidentally misused or mistakenly claimed furlough. Overpayments can be made through the HMRC portal. 

We recommend that all employers who furloughed their staff check all of their payment records, ensuring that they are up-to-date and accurate and that they include written confirmation that the employee agreed to be furloughed. 

For employers who may have intentionally made dishonest claims, we recommend seeking legal advice as quickly as possible as an intentionally dishonest claim, could be considered to be criminal fraud. If false representation can be proved, it can lead to a maximum 10-year custodial sentence. 

For any employers who feel that they have claimed furlough for employees who were not eligible to be on the scheme, Jarmans Solicitors recommend seeking specialist legal advice at the earliest opportunity. Contact us by email or phone to make an appointment.

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