Furlough Scheme Updates Fraud and Furlough Scheme – 22nd August 2020

Employers are required to keep records on all furloughed workers for a minimum of five years, meaning HMRC can audit applications retrospectively to ensure there has been no abuse.  Exactly how HMRC will penalise employers found to have made fraudulent claims through the Coronavirus Job Retention Scheme is not yet clear – the Government has not set out any formal guidance on this. However, some employment lawyers have speculated that HMRC could extend the penalty regime it currently uses for cases of tax non-compliance.  Employers found guilty of fraudulent scheme claims may suffer more than financial penalties or custodial sentences. They also risk significant damage to their reputation.