Great Britain: companies return more than £760 million from the furlough scheme

A total of 3,777 companies, including clothing giant Primark and online retailer Asos, have voluntarily returned some of the funds released by the government under its Coronavirus Job Retention Scheme (c.f. article No.12393 and No.12282). These employers are realizing that they had been less impacted by the pandemic than expected, and therefore did not need the aid. Accounting group UHY Hacker Young estimates some £760 million (€874 million) has been handed back. While the refunds are currently a voluntary effort, they are expected to intensify as the government plans to scrutinize the scheme more closely, including the setting up a special Covid-19 fraud task force within the HMRC tax department. UHY Hacker Young partner, Neela Chauhan, believes that the HMRC “has taken a ‘softly, softly’ approach so far by issuing nudge letters to those it suspects may have claimed furlough money incorrectly, encouraging them to hand back money voluntarily if necessary.” “The next stage of its investigations will be much more aggressive,” she warns. Currently, employers don’t have to provide proof of financial hardship in order to qualify for the scheme. Penalties are, however, intended for cases of misuse. Since the start of the pandemic, the government has disbursed £53.8 billion pounds (€61.8 billion) under the Coronavirus Job Retention Scheme, which is due to run until 30 September.