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Companies returning furlough payments

Published: Tuesday 22nd September 2020

Some UK companies are returning furlough payments they received. It is estimated approximately £3.5 bn has been paid out in error or to fraudster companies in the UK since the furlough scheme began. Over 80,000 employers so far have returned money they received to help cover employee salaries, HMRC reports. Roughly £215m has been returned to the government from these companies so far. However, nearly £35.5bn in total has been paid out in furlough payments. The furlough scheme pays up to 80% of a worker’s salary whilst on leave and ends in September. The current scheme requires companies also contribute to these payments.

Files with the words investigations and fraud written on them to highlight some UK companies are returning furlough payments.

Some of the money has been returned directly by companies. Whilst some UK companies are returning furlough payments, others are reducing the payments they receive. HMRC released a statement, saying, “HMRC welcomes those employers who have voluntarily returned CJRS grants to HMRC because they no longer need the grant, or have realised they’ve made errors and followed our guidance on putting things right.” HMRC is encouraging employees to report employers they believe are fraudulently claiming furlough money. The government’s website features a form specifically for this purpose. Building on its promise to seek out fraudsters, a special government taskforce is investigating claims.

Choosing to repay

Some companies are going even further and returning all the money they have received through furlough. These companies include housebuilders Redrow, Barratt and Taylor Wimpey. Other companies repaying they money they received include Games Workshop, Bunzl and Spectator magazine.

Numerous other companies have announced they will not claim money under the government’s latest scheme, including John Lewis and Primark. This scheme sees payments of £1,000 given for every employee brought back from furlough and employed until the end of January 2021.

Small note with the words what's next? written on it to highlight that some UK companies are returning furlough payments

What next for everyone?

The government is under increasing pressure to extend the furlough scheme. This is because industry experts warn of large-scale unemployment once the scheme ends. However, the government remains steadfast in its decision to end furlough. HMRC says, “To tackle the impact the pandemic had on people’s jobs, businesses and livelihoods, the government introduced one of the most generous and comprehensive packages of support in the world. The Coronavirus Job Retention Scheme has helped 1.2 million employers across the UK furlough 9.6 million jobs and protecting people’s livelihoods.”

However, fears about what happens next are growing. It is estimated that nearly 1 million small businesses have used the furlough scheme. Furthermore, approximately 23% of all small-sized employers are considering redundancies in the next three months, it has been reported. Regarding this, Craig Beaumont, of the Federation of Small Businesses, said, “Sixty per cent of those working in the private sector do so for a small business. So if that happens without any intervention, then that’s a huge increase in mass unemployment.”

 

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