Clarkslegal LLP - Solicitors in Reading and London

Legal Updates

Employment COVID-19 Update: HMRC’s Proposed New Powers

18 June 2020 #Employment #Podcasts and Webinars

It has been reported that as many 34% of employers have asked their furloughed employees to carry out some form of work, administrative task or even cover another employee’s work, whilst on furlough.  This is against government guidance and new proposed revisions to the Finance Bill 2020 aim to give further powers to HMRC in order to mitigate this sort of furlough related fraud. These new powers, a direct response to claims that HMRC has been inundated with reports of employers abusing the furlough scheme and claiming when they are not entitled to do so, would give HMRC the power to:

  • Use its information and inspection powers to check a furlough claim has not been overpaid and that a furlough payment has been used to pay furloughed employee costs.
  • Raise an Income Tax assessment on anyone who has received a furlough payment to which they are not entitled, or anyone who has not used a furlough payment to pay furloughed employee costs.
  • Charge a penalty where a person deliberately makes an incorrect claim for a furlough payment. It also gives HMRC powers to charge a penalty where a person who has claimed a furlough payment deliberately does not use it for the costs it was intended to reimburse.
  • To make a company officer jointly and severally liable for the Income Tax charge raised in relation to any furlough payment to which the company was not entitled or any furlough payment which was never intended to be used to pay furloughed employee costs in certain circumstances.

Furthermore, a recent YouGov survey of more than 500 business leaders has found that 51% will have to make lay-offs within three months when the furlough scheme comes to an end. This includes 21% who say they would have to let at least three in ten of their workers go. Only 34% of those surveyed say they would be in a position to retain their entire workforce.

Our podcast on this update can be found here [HMRC’s Proposed New Powers] 

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

Read more articles

Jacob Montague

Jacob Montague

T: 0118 960 4613
M: 0790 9964 585


Employment team
+44 (0)118 958 5321