Warning to pub employers on furlough fraud

By Emily Hawkins contact

- Last updated on GMT

No excuse: employers must not attempt to play the furlough system, a trade body executive has warned
No excuse: employers must not attempt to play the furlough system, a trade body executive has warned

Related tags: Coronavirus

The chief executive of one of the UK’s largest trade bodies representing the pub sector has reiterated the Government’s warning that employers should not abuse the furlough system.

Under the Government’s Coronavirus Job Retention Scheme, employers can apply to furlough their workers while pubs are closed, with 80% of their wages subsidised.

However, HMRC revealed that it has already received almost 800 reports of individuals claiming that their employer has been trying to illegally benefit from the scheme.

It did not go into details about which sectors the 795 reports involved.

A spokesperson for the tax authority outlined what could be included as fraudulent behaviour from an employer and said: “It could be that you’re not being paid what you’re entitled to, they might be asking you to work while you’re on furlough, or they may have claimed for times when you were working.

“We’d ask anyone concerned that their employer might be abusing the scheme to please contact us.”

The authority said it would help companies make corrections when there had been “a genuine mistake” made, but would prosecute others in serious cases.

UKHospitality chief executive Kate Nicholls said employers must not attempt to trick the system by asking furloughed staff to work.

Clear guidance

She said: “The Government’s guidance is very clear on this. 

“You cannot be making money, providing services or volunteering in a different role for your employer if you are furloughed. 

“There should be no confusion among businesses and no excuse for attempting to get round the system.”

Guidance on the Gov.uk website states employers cannot ask their furloughed employees to do any work that makes money for their organisation or provides services for it.

This also applies to any organisation linked or associated with the relevant business.

However, furloughed employees can take part in volunteer work or training and have been encouraged to do so by the Government.

Employers risk a prison sentence of up to 10 years and unlimited fines if found guilty of dishonestly attempting to receive money from the system, under the offence of fraud.

Suspected cases of fraud can be reported online on the HMRC website.

Emma McClarkin, chief executive of the British Beer & Pub Association, added: “We welcome the continuation of the Job Retention Scheme until the end of July. Of course, how the scheme will operate post-August in terms of employer’s contributions need to be clarified. 

“In particular, pubs and brewers alike need the scheme to be flexible enough to allow them to bring their staff back to work as needed, in order to prepare their businesses for re-opening. Introducing that flexibility from 1st​ August is too late for pubs that are targeting early July for re-opening."

Related topics: Legislation, UnitedWeStand

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