The Coronavirus Job Retention Scheme (‘the Furlough Scheme’) gave money to employers who were required to close their businesses during the lockdown restrictions. It enabled them to pay their staff 80% of their normal wages up to a specified limit. This was intended to reduce mass-redundancies in the worst affected sectors, such as hospitality.
Whilst the Furlough Scheme was largely successful in preventing redundancies, it did not impose significant verification on the applications made by businesses due to the lack of time available for planning.
The Government estimated that the value of fraudulently claimed Furlough Scheme money amounts to £7.3bn. The most common fraud allegations made against businesses include:
claiming furlough money for non-existent or dismissed employees
claiming furlough money for employees who continued to work during lockdowns
misrepresenting the number of hours their employees worked to maximise the furlough payment
If one of the investigating agencies suspects furlough fraud, it is likely to pursue criminal charges.