HMRC’s Approach to Furlough Scheme Abuse

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HMRC’s Approach to Furlough Scheme Abuse

Speaking at a Treasury Committee on 8th April 2020, Jim Harra, Chief Executive of HMRC, gave us some insight into HMRC’s approach to the furlough scheme.
Whilst the government have not yet issued any further guidance on the Job Retention Scheme or furloughed workers, Mr Harra made the following headline points:

  • Employees must be completely furloughed and not engage in any work for their employer at all if their employer is going to make a successful claim. (We knew this anyway!)
  • Employees will be encouraged to report employers who ask them to work during any furlough period via an online hotline service.
  • There will be criminal charges for company directors who seek to claim for employees who have been furloughed but who are still being asked to work.
  • There will definitely not be any grant payments on directors’ dividends although they will be able to claim 80% on PAYE wages.
  • Employees can definitely be furloughed on rotation.
  • There is no plan to open the Job Retention Scheme for those who were in between jobs on 28 February 2020.The first payments to employers under the Job Retention Scheme will probably be sometime in June although HMRC will “strive for Mid-May” with the Scheme’s “official” opening date being heralded as 20 April 2020.

Watch this space for more!

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