In a move to combat furlough fraud, a bill giving HMRC the power to investigate furlough payments is currently being fast-tracked through parliament, and could be passed as early as July.

The legislation will give HMRC the power to ensure that furlough grants have been correctly used to pay furloughed workers’ wages, and that employers haven’t been overpaid under the scheme. Under the bill, organisations committing “furlough fraud”, by using furlough grants for another purpose, will face a financial penalty.

The bill allows employers a 30 day ‘amnesty’ within which to admit mistakes before any penalties are applied, so employers are being encouraged to double check their claims in order to catch (and report) any mistakes quickly.

The move comes as reports of employers breaking the rules are becoming mainstream news. The BBC has reported on a number of cases in which furloughed employees are being asked to continue to work for their employer, despite this being against the rules of the scheme. In one case, a furloughed employee was asked to work using her personal phone number and email address, presumably to avoid detection.

HMRC has confirmed that it has received more than 3,000 reports of furlough fraud since April, so combatting abuse of the scheme is likely to be high on its agenda.

If you need any advice or support relating to the furlough scheme, please contact us.