“Initially I didn’t know how to feel, but it only took about five or ten minutes’ worth of research to realise that no, you definitely couldn’t work in any capacity.”
Steve (not his real name) is 27 and works in manufacturing in County Durham. His employer told him that he had been furloughed but he later received a message from his boss asking him to log on and work.
Under the furlough scheme, which was brought in to minimise unemployment due to the coronavirus crisis, the government pays 80% of staff salaries up to £2,500 a month. But once an employee has been furloughed, they cannot do any work that would help their employer make money.
Nevertheless, HM Revenue and Customs has told the BBC that it has received more than 3,000 reports of furlough fraud since April.
After Steve learned that he was not allowed work while on furlough, he felt uncomfortable and refused to log on. He lost his job in May.
“I’m disappointed and angry that there are companies out there that want to exploit the furlough scheme,” he said.
‘Magnet for fraudsters’
More than a quarter of the UK workforce is now being supported by the furlough scheme and the cost so far has reached £19.6bn.
An employer applies online, giving their employees’ names, National Insurance numbers and dates of employment.
But the system has been found to be open to abuse. One survey found that more than a third of furloughed employees have been asked by bosses to carry out work while receiving funds under the government’s coronavirus job retention scheme.
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.
Earlier this month, its chief executive Jim Harra told the Commons Public Accounts Committee that the scheme was “a magnet for fraudsters”. He said tipoffs were taken “very seriously”.
There is no automatic trigger that would tell HMRC someone was being asked to work while on furlough, or if the money had not reached the right account.
But if an employee reported their employer to HMRC, it would be straightforward for the department to cross-check the Pay As You Earn (PAYE) system. An employee could also produce evidence that shows they had been asked to work.
Lucy (not her real name) is in her mid-20s and works in housing in London. She was placed on furlough in March but says she was then asked to work using her personal email account and phone number.
Lucy told the BBC she is still working up to 20 hours a week, even though she knows what she is doing is wrong.
“My livelihood depends on this,” she said. “I feel a huge amount of anxiety.”
“The whole team is still working. They’ve told us if we want to stop we can, but I know that if I did, it would look bad – that I wouldn’t look committed.
“Also, I want my company to survive this.”
“On the one hand, I want to work to feel normal while the world falls apart, but it feels like a moral conundrum. I am confused and upset and wondering what is the right thing to do.”
Where employers are found to have inadvertently broken the rules, they could be made to return the cash. But if HMRC can prove they intended to do it, the employer could face up to 10 years in prison.
Toby Duthie, a forensic accountant and partner at Forensic Risk Alliance, said that while the government had needed to act quickly to cover wages, the speed at which the furlough scheme was introduced meant there was a lot of uncertainty and a lack of clarity for employers.
“This is also open season for people who want to abuse the system,” he told the BBC.
HMRC has stressed that some employers may accidentally be committing furlough fraud – such as inviting colleagues back to do some work before their starting date. And during its first round of investigations, around one third of cases did not warrant further investigation.
It said: “We believe the vast majority of companies will have used the system correctly.”
Names have been changed to protect identities.