Have You Been Furloughed?

Have You Been Furloughed?

Professional Business Support, Accounting, MTD System, Taxation, Business Start Ups, VAT Advice

Government FurloughThere seems to be much confusion and uncertainty lately about procedures etc put into place by the government, due to Covid19. The furlough rules are sometimes misunderstood, and in some cases abused. A recent BBC report pinpointed the case of a man who was furloughed, but then asked by his boss to work. However, he knew if he obeyed his employer and started to work, he would void his furlough status.

HM Revenue and Customs claim to have received over 3,000 reports about this type of fraud since April. Workers may feel compromised and conflicted, and that their job is at risk if they refuse to work. This is not an unfounded concern as the man in the example did actually lose his job, possibly due to his refusal to go along with his bosses request. He commented “I’m disappointed and angry that there are companies out there that want to exploit the furlough scheme.”

Around one quarter of the workforce in the UK is being supported by the furlough scheme and so far the cost amounts to £19.6bn. Employers apply online, giving the name, National Insurance number and employment date of the employee. Unfortunately the system is open to abuse, with over a third of employees being asked to work by their employer. This is despite the fact that the worker is receiving funds under the government’s coronavirus job retention scheme. Some employers want their staff to carry out their usual roles, while almost 30% have been asked to undertake admin tasks. Workers are often in a dilemma as they don’t want to refuse their boss and look like they aren’t committed, they may also worry that the company could go under.

HMRC are vowing to tackle fraudulent and erroneous claims, although it relies on the workers in question to report the situation. Once reported though the accusation is investigated and fairly simple to prove. HMRC are promising fines and even prison for those misusing the system.

For advice and guidance on all matters relating to finances, tax and business support call John S Culwick on (01268) 680702 or (07940) 854321.

Friendly Personal Approach Financial Advice, Payroll, Budgeting & Pension Advice, Essex