Furlough Fraud: HMRC targets property firms for investigation

A law practice says HM Revenue & Customs is launching a probe into companies that have allegedly abused the Coronavirus furlough scheme - and property firms are at the top of the list.

Law firm Collyer Bristow says it is aware that the Revenue is beginning to investigate possible abuses of payments made as part of the Coronavirus Job Retention Scheme, which was introduced in March.

“Property and construction businesses are firmly in its sights” warns the company.

Investigations are focused on businesses that deliberately or inadvertently allowed staff to work whilst on furlough and the exercise comes ahead of new legislation that will introduce a 90-day amnesty for businesses.  

Estate Agent Today has carried one extensive complaint regarding furlough by a Winkworth franchisee making allegations about a rival firm - allegations which were refuted by the rival. EAT has also been told of other agencies allegedly abusing furlough rules, and of a well known supplier to the industry doing the same thing.

“The scheme has been a lifeline for many property and construction businesses yet there are reports that it is being abused, for example, by employers asking staff to work whilst on furlough” says Andrew Granger, a partner in Collyer Bristow’s employment law team.

HMRC has now launched an online portal to enable employees or members of the public to report suspected fraud under the scheme and it has made its first arrests for furlough abuse.

“With legislation shortly to receive Royal Assent that will introduce a 90-day amnesty allowing businesses to repay furlough money claimed in error without threat of sanction or penalty, HMRC is sending a clear message to businesses – take advantage of this amnesty or face investigation” says Granger.

“Businesses that do not take advantage of such an amnesty and are later found to have stretched the rules may find themselves under serious investigation and facing fines” he adds.

“It is vitally important that employers keep good and clear records of staff on furlough, particularly as it is now possible to allow staff to return part-time. In addition, employers are required to have sent written confirmation to employees confirming that they have been furloughed. These written agreements must be retained for five years.”