Furlough fraud has unfortunately been on the rise in recent weeks, as people seek to exploit the generous payments shelled out by the government. In March, the Treasury announced it would be setting up a variety of schemes including furlough for PAYE employees, the self-employment scheme, and business grants to help those affected by the COVID-19 outbreak. However, exploitation of the rules has meant Mr Sunak is now considering harsher punishments to be handed out by tax officials at HMRC.
- Furlough fraud: Shock one in three employees pressured into work
Those who break the rules will fall foul of new legislation to be introduced by the Chancellor, and potentially made an example of to dissuade others from breaking the law.
Breaking the Job Retention Scheme rules could see companies forced to pay a 100 percent tax rate on the furlough payments, reported The i newspaper.
At present, the government is covering 80 percent of all salaries up to £2,500 per month.
This effectively introduces a higher tax band to strike fear into companies who may be looking to be flexible with the rules.
The legal rights app Lawya.com has found just over one in three employees on furlough is currently under pressure to continue working while on furlough.
Out of the 2,000 workers surveyed, 27 percent said they were asked to send and respond to emails, with 17 percent asked to make phone calls.
One woman revealed her experiences with being pressured to continue working, and feared she would lose her job otherwise.
The woman, who did not wish to be named, said: “I know if I’m not useful to my employer in some way, and they are struggling financially, it makes sense for me to be the first to be let go.”
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The whistleblowing charity, Protect, also highlighted a number of issues where Britons were being forced to work, or not informing staff they have been furloughed.
However, it is not solely the furlough scheme which will be subjected to the new rules.
Those on the self-employment scheme may also bear the brunt of the stricter laws imposed.
If suspected that a business did not need the loan, HMRC will place the burden on the organisation to prove otherwise.
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HMRC has, however, stated that it is not trying to unfairly punish businesses.
Those who have made genuine mistakes will be provided with the leniency to correct these to ensure they receive the right amount.
However, for those who appear to be making a systematic effort to evade the law, strict punishments will follow.
This includes the Revenue chasing down all company directors, who will be held equally liable for the company decision.
According to recent data, nine million people have been affected by the furlough scheme alone in the UK.
Millions of claims have also been made for the self-employment equivalent.
Nearly nine million people have been affected by the furlough scheme according to recent HMRC data.
The government is slowly winding down the furlough scheme to give employers more responsibility.
From July, there will be a process of handing more costs over to businesses from the Treasury to handle their employees.
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