Whistleblowing To HMRC Up 70%, Driven By Furlough Fraud
A freedom of information request made by Pinsent Masons has found that whistleblowing reports to HM Revenue and Customs (HMRC) increased from 8,900 in the 2019/20 financial year, to 15,000 in the 2021/22 financial year. This represents an increase of 68.54% in 2 years
Much of the 6,100 increase was made in the 12 months up to the 1st April 2021, rising to 13,600, with most of the increase in whistleblowing reports over the last 2 years having been fuelled by reports of furlough fraud.
5,800 (38.67%) of the reports were deemed sufficiently serious to require further action
In a statement, HMRC stated: "Clamping down on those who try to cheat the system is a key priority for us. We are committed to ensuring that the tax system and labour markets operate fairly, efficiently and within the law."
As we highlighted in a previous article on the issue of furlough fraud, Pinsent Masons reported that HMRC had received 13,775 reports of furlough fraud from whistleblowers, including via its online report form, with many of these reports coming from employees of the businesses being reported.
The Scale Of The Furlough Fraud, Of Which Little Is Likely To Be Recovered
In its most recent annual report and accounts, HMRC estimate that the total amount of furlough fraud could have been up to £6.4 billion, but was “most likely” to have been in the region of £4.5 billion.
HMRC state in their report that: “Previous provisional estimates for the total value of error and fraud in 2020 to 2021…..stood at between £4.5 billion and £8.0 billion, with a most likely estimate of £5.8 billion…..Across the full two-year lifecycle of the three schemes (covering 2020 to 2021 and 2021 to 2022), the total value of error and fraud is now estimated to be between £3.2 billion and £6.4 billion, with a most likely estimate of £4.5 billion…This is less than the previously published range for 2020 to 2021 alone.”
Nevertheless, HMRC also estimate that only around a third of the money lost to furlough fraud will ultimately be recovered. In a statement released on the 12th January 2022, HMRC said: “Work to recover fraud and error began almost as soon as the schemes launched. We recovered £500 million of overpayments in 2020 to 2021. The government then invested £100 million in a Taxpayer Protection Taskforce of 1,265 HMRC staff to combat fraud in the schemes. We expect the taskforce to recover £800 million to £1 billion between 2021 and 2023.“
Accordingly, if the HMRC recover an addition £1 billion of the money lost to furlough fraud by 2023 to add the £500 million already recovered, that still means that £3 billion will have been lost to furlough fraud in total. Hence, just 33.33% of the monies lost to furlough fraud would have been recovered.
A Third Of Employers Expect The 4 Day Working Week To Be The Norm Within 10 Years
According to a new report published by the Chartered Institute of Personnel and Development (CIPD), 34% of employers believe that a 4 day working week will have become the norm within the next decade.
At present however, just 10% of employers have implemented a 4 day working week for some or all of their staff over the last 5 years, by reducing hours without reducing pay. Moreover, 42% of that 10% had done so as a result of the furlough scheme, whilst only 1% of those employers who have not yet implemented a 4 day working week have any plans to do so in the next 3 years.
Furthermore, 37% of employers take the view that a 4 day working week will not become a reality over the next decade.
Commenting upon the findings, the CIPD stated: "Most employers in our survey believe that there would need to be an increase in productivity by working smarter and/or investing in technology to facilitate a four-day week without reducing pay. Increasing workplace productivity should be the focus for policy-makers interested in supporting a shift to the four-day working week."
The CIPD added: "There is the potential to boost productivity by raising the quality of people management and development in the UK, particularly among SMEs and through supporting employer investment in technology across the economy. This involves focusing on industrial strategy and making changes to skills policy. It will also require a change in the quality and availability of business support, to boost firms’ adoption of technology and build their people management and development capability."
