Coronavirus job retention scheme changes and furlough fraud

by | Jul 19, 2020

Job retention scheme and furlough fraud 

As lockdown eases, the coronavirus job retention scheme (CJRS) becomes more flexible but employers will pick up more of the costs from 1 August 2020. The key points are: 

  • From 1 July 2020, the furlough rules will change to allow flexible furlough leave. Employees can come back to work part-time and be furloughed for the rest of their contractual hours. Hours worked should be paid at their normal rate while employers can still claim 80 per cent of furlough pay from HMRC, subject to the cap of £2,500, reduced proportionately with hours worked;
  • The Third Treasury Direction has been published. It sets out the rules for the flexible furlough scheme from 1 July 2020 and how the amounts employers can claim under the CJRS will reduce in phases from 1 August until the scheme closes on 31 October 2020. The Government’s guidance for employers has been updated to reflect the changes;
  • The Government has published draft legislation to deal with furlough leave fraud. The regulations allow HMRC to recover payments under the CJRS to which the individual was not entitled or the payments were not used to pay the employee in accordance with scheme rules; and
  • It has been widely reported that some businesses have required their employees to work while the employer claimed furlough pay and even in some cases, cutting the employees’ wages to 80 per cent so that the employees worked at no cost to the employer. The draft legislation also allows HMRC to charge penalties for deliberate non-compliance with the CJRS rules.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

FOR MORE INFORMATION get in touch today!