Keep clear records of flexible furlough hours or face HMRC investigation, lawyer warns

Government plans to make the furlough scheme more flexible will make keeping records more complex leaving operators in danger of being accused of fraud, a transport lawyer warned this week.

The move to allow employers to bring furloughed workers back part time from 1 July 2020 is part of government plans to wind down the Coronavirus Job Retention Scheme in stages as lockdown eases and more businesses re-open.

Under the change, employers will be able to decide the hours and shift patterns their staff will work on their return and will be responsible for paying their wages while in work.

Transport solicitor Laura Smith of law firm Backhouse Jones warned that as staff can report any employer they believe to be defrauding the scheme via an HMRC fraud hotline and as monitoring furlough payments will become more complex once shift patterns are introduced, employers should keep clear records to ensure they can demonstrate they have not fallen foul of the scheme.

She added that employers must also ensure they maintain wage levels to a minimum of 80%.

“The key is you are responsible for paying staff’s wages whilst they are working for you – the 80% rate in that period is still important – no matter what shift pattern you introduce your staff are still eligible to receive 80% of their wages and employers must make sure that is met during the months of June and July,” she warned.

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Smith also warned operators to prepare for the tapering off of the furlough scheme.

The scheme will close to new entrants on 30 June and since the minimum furlough time is three weeks the deadline to register new entrants closed on 10 June.

The level of furlough payments by the government will also be reduced. Currently it pays 80% of wages up to a cap of £2,500 as well as employer national insurance and pension contributions. Employers are not required to pay anything.

However from August the government will only pay 80% of wages up to a cap of £2,500, with employers obliged to pay national insurance and pension contributions.

In September this will bes reduced once more with the government paying 70% of wages up to a cap of £2,190 and employers required to pay national insurance and pension contributions and 10% of wages to make up the 80% total, to a cap of £2,500.

In October there is a further cut which sees the government shoulder 60% of furloughed staff’s wages up to a cap of £1,875. Employers will have to pay national insurance and pension contributions and 20% of furloughed staff’s wages to make up an 80% total, up to a cap of £2,500.