Furlough scheme being abused

[Blackpool Rock]

It was always inevitable that there was going to be some companies abusing this system but according to one survey i'm shocked at how high the abuse appears to be -

A third of furloughed employees were asked to carry on doing their usual job, while 29% were told to undertake more administrative tasks, according to the survey by Crossland Employment Solicitors.

HMRC is now preparing to tackle fraudulent and erroneous claims

External Link/Members Only

[kippydon]

It was always inevitable that there was going to be some companies abusing this system but according to one survey i'm shocked at how high the abuse appears to be -

A third of furloughed employees were asked to carry on doing their usual job, while 29% were told to undertake more administrative tasks, according to the survey by Crossland Employment Solicitors.

HMRC is now preparing to tackle fraudulent and erroneous claims

External Link/Members Only

what did people think, of course companies were going to take the piss, why would you pay someone wages when you get most of it paid by the tax payer and then once it all over , just sack them

just look at BA, that is what they are doing

[Beamer]

It was always inevitable that there was going to be some companies abusing this system but according to one survey i'm shocked at how high the abuse appears to be -

A third of furloughed employees were asked to carry on doing their usual job, while 29% were told to undertake more administrative tasks, according to the survey by Crossland Employment Solicitors.

HMRC is now preparing to tackle fraudulent and erroneous claims

External Link/Members Only

Can't believe some people although we shouldn't be surprised. All except one of my
neighbours here have been following the rules and helps us see the good in most people.
The one "cheating" guy has been caught out and is apparently being charged with fraud. Will try and find out what type of fraud is involved.

[Blackpool Rock]

what did people think, of course companies were going to take the piss, why would you pay someone wages when you get most of it paid by the tax payer and then once it all over , just sack them

just look at BA, that is what they are doing

Yeah while what BA are doing isn't nice I believe it's within the rules and I doubt they are taking the furlough money and then asking the same people to actually work.
For larger companies they will have CSR and whistle blowing policies in place so know they are likely to be grassed up whereas smaller companies with half a dozen or so employees are probably more likely to take advantage

[Moby Dick]

I think the furlough scheme was flawed.
It’s odd that we (us the taxpayer) pay people to do nothing. Far too generous.

It’s goal should be
1) Provide employees money so they can carry on paying their essential bills/not get into too much debt.
2) Enable employers to reduce costs so they can SURVIVE the downturn and provide work / wages when they are allowed, ie business resumes.

I think the flexible scheme where the employer can ask the employee to work (and get paid their equivalent daily rate for it) and the remainder is made up by the government (so minimum is 80% up to £2.5k)  will allow companies to SURVIVE and is still fair and more than generous for the employee.

Not sure about the self employed who got paid and are still able to work (sounds too good to be true).
Clearly those that have had to close and have paid their taxes should be entitled to similar as PAYG employees.

And then there are the large companies, stopping all UK activities (not even considering working from home where you can) taking full advantage of the furlough scheme for thousands of employees and then holding the government to ransom threatening to close their UK operations and move their production overseas unless they get a bailout from the government (UK taxpayer)

[threechilliman]

Not a massive surprise IMO.

The ease with which you could claim the money surprised me - a few company/employee details and away you go, no questions asked. There should be some rigorous checks carried out after this but I doubt it'll happen, certainly not to the degree required.

[David1970]

Not a massive surprise IMO.

The ease with which you could claim the money surprised me - a few company/employee details and away you go, no questions asked. There should be some rigorous checks carried out after this but I doubt it'll happen, certainly not to the degree required.

I have been furloughed and my company is paranoid about, I got an email saying if I used my company phone or company email account I would be liable to disciplinary action. They are worried the tax inspector will ask to see phone and email recorded of those furloughed.
As for the furlough scheme I back it, without it I would be out of a job and I know many small companies who would have gone under without it. This is keeping real people afloat during the pandemic, something not of their doing. A lot of the people complaining about it did not bat an eyelid when the banks were bailed out, which was caused by the banks own action.

[winkywanky]

Sad but inevitable that the scheme would be fraudulently abused. 3000 reports of that. I guess a small proportion?

I think the scheme did have to be made very easy to use, to have too many checks would have snowed it under and delayed money going out, and people were desperate for that money.

But it was done through HMRC so I guess a high degree of checkability afterwards, which is as it should be.

Inadvertent misuse will mean money simply returned to HMRC, but wilful fraud will be prosecuted. Sounds fair to me.

Although the money was made easily available, presumably employers were sent a list of rules for the use of the furlough money? One would hope so.

[threechilliman]

I have been furloughed and my company is paranoid about, I got an email saying if I used my company phone or company email account I would be liable to disciplinary action. They are worried the tax inspector will ask to see phone and email recorded of those furloughed.
As for the furlough scheme I back it, without it I would be out of a job and I know many small companies who would have gone under without it. This is keeping real people afloat during the pandemic, something not of their doing. A lot of the people complaining about it did not bat an eyelid when the banks were bailed out, which was caused by the banks own action.

I think it's a good idea in principle, it's the lack of checks that worry me.

[David1970]

I think it's a good idea in principle, it's the lack of checks that worry me.

I have been told by an accountant that HMRC are going to be checking companies who took part in the furlough scheme over the next year. I think that is why my employers are being so hard about anyone furloughed not working or even communicating through company phones or emails.

There some good companies still out there like IKEA
External Link/Members Only

[RedKettle]

I have been told by an accountant that HMRC are going to be checking companies who took part in the furlough scheme over the next year. I think that is why my employers are being so hard about anyone furloughed not working or even communicating through company phones or emails.

There some good companies still out there like IKEA
External Link/Members Only

Games Workshop Plc also returning the money - whilst they closed all their shops online sales increased so they think it is fair to return the money.  Excellent example.

[RedKettle]

I think the furlough scheme was flawed.
It’s odd that we (us the taxpayer) pay people to do nothing. Far too generous.

It’s goal should be
1) Provide employees money so they can carry on paying their essential bills/not get into too much debt.
2) Enable employers to reduce costs so they can SURVIVE the downturn and provide work / wages when they are allowed, ie business resumes.

I think the flexible scheme where the employer can ask the employee to work (and get paid their equivalent daily rate for it) and the remainder is made up by the government (so minimum is 80% up to £2.5k)  will allow companies to SURVIVE and is still fair and more than generous for the employee.

You have to remember the speed that they had to act and the scale of the issue.  What they achieved was incredible (and a contrast with usual Government chaos) and there simply was not the time to finesse the scheme - it had to be simple and also quickly stabilise confidence.

[NIK]

Schoolkids aren't doing any schoolwork at home.
The furlough scheme is being abused. 
They will be telling us bears shit in the woods next. 

[PepeMAGA]

it was rolled out so quickly, guess its ripe for abuse. hopefully the fraud claims will get it back plus interest.

[themightyimp]

according to the survey by Crossland Employment Solicitors

Bet they do ambulance chasing studies too

[Digby232]

Self employed scheme was fine if you could keep working but people like hairdressers lost out big time!For second grant you got to be impacted on July 14th so government opening hairdressers/ pubs etc so they won’t be able to claim. I know dozens or taxi drivers that are finished. That trade won’t pick up for another 6 months at least  . Got loans on cars etc which they cant now pay so that’s it finished! Don’t forget the self employed one is taxed so in a years time your giving a quarter back anyway!

[GingerNuts]

Self employed scheme was fine if you could keep working but people like hairdressers lost out big time!For second grant you got to be impacted on July 14th so government opening hairdressers/ pubs etc so they won’t be able to claim. I know dozens or taxi drivers that are finished. That trade won’t pick up for another 6 months at least  . Got loans on cars etc which they cant now pay so that’s it finished! Don’t forget the self employed one is taxed so in a years time your giving a quarter back anyway!

There are employed and self-employed who have "lost out" and the employed furlough pay and self-employed grant are both taxable.

[mh]

I'd say it barely matters if it is being abused in small businesses, because without this scheme we'd have had truly mass unemployment and a gigantic hole blown in supply chains that would take a decade to repair, during which time businesses would continue to fail due to their suppliers or customers falling like dominoes.

HMRC should definitely investigate the most egregious cases, especially from national chain and multinational businesses and those companies that have actually had an upturn in business income while still cutting their wage bill. But for SMEs this is just another form of quantitative easing that is allowing the economy not to stall/halt while the country is locked down.

A temporary account manager from my business' mobile phone provider called me last week saying our usual account manager had been furloughed. There is no reason why that company should have to furlough staff. The new guy even boasted that business was booming due to extra home working. More SIMs, more contracts, higher data allowances etc...

[whiskyfan]

Regardless of whether the furlough scheme is/was abused or not, the reality is that a large percentage of those on furlough will end up redundant at the end of it, and the longer you're on furlough the higher the chance of that happening is.

[l4at]

I'd say it barely matters if it is being abused in small businesses, because without this scheme we'd have had truly mass unemployment and a gigantic hole blown in supply chains that would take a decade to repair, during which time businesses would continue to fail due to their suppliers or customers falling like dominoes.

In short term yes, what’s to say that furlough is purely kicking the can down the road? The mass unemployment would just occur in October instead of now. And that’s not even considering the possibility of a second wave.

[mh]

In short term yes, what’s to say that furlough is purely kicking the can down the road? The mass unemployment would just occur in October instead of now. And that’s not even considering the possibility of a second wave.

It won't save the jobs of all those furloughed. It will save some because the employer won't go bust and the employee stays employed. It will save others because the economy won't tank as hard in total and many knock on business failures will be avoided. And it will mean there are jobs for those made redundant to take up. Again, not all of them, but some.

We're barred from talking politics now, but everyone knows my political feelings and yet I have no criticism of the actions taken in this respect. Many others, but not this. It is economically sensible and you only have to look at the similar schemes worldwide to understand that.