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UK accounting firms still drawing furlough cash, HMRC data reveals

Some of accounting’s top names are still tapping the government’s coronavirus furlough scheme for help, according to new data released by the Treasury.

29th Jan 2021
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Haines Watts, and UHY Hacker Young are the highest profile accounting firms still requiring support, however many others make the publicly available list as the pandemic continues to disrupt the business landscape.

Other accountancy and audit firms in the data include; Kreston Reeves; Price Bailey; Bishop Fleming; Carter Backer Winter; TaxAssist Accountants; Buzzacott; Duncan & Toplis; Mercer & Hole; Smith Cooper; SRLV; Thomas Wescott; Gerald Edelman; Ensors; Simmons Gainsford; Shipleys; Silver Levene; Dains, Beavis Morgan, along with several others.

More than 740,000 firms around the UK who made claims through the Coronavirus Job Retention Scheme in December have had their details published as part of a transparency drive by Chancellor Rishi Sunak’s department.

PAYE schemes

However, payroll expert Kate Upcraft has raised questions about the 740,000 ‘employers’ touted in the list.

“It’s hard to infer from that number how many employers this relates to as an employer can have one scheme or multiple PAYE scheme because that’s their decision, not HMRC’s nor their agents,” she said.

A search for the word ‘payroll’ in the 17.3mb file brings up instances of names given to PAYE schemes, including a number of local authorities who you wouldn’t expect to be eligible. For example, ‘Kent County Council (The Kent schools payroll)’ comes up, which appears to be an overarching scheme for all schools in Kent.  

‘A magnet for fraudsters’

The furlough scheme, which pays a percentage of an employee’s wages if they are unable to work because of a Covid-19 lockdown, generated controversy last year when it emerged many large and multinational corporates were using the scheme despite remaining profitable.

Some, such as B&Q, ScrewFix, Tesco and Sainsburys, opted to return millions of pounds following public pressure. Auditor RSM said in December it would return £4.4m, but smaller firms in the sector have not been immune to the consequences of the pandemic, and many have had no choice but to furlough staff.

It also became a magnet for fraudsters due to how quickly it had been set up, experts said, and it is believed around £3.6bn in furlough payments have been claimed in error throughout the year with about £2bn of that total stolen.

The lack of checks around claimants “made it inevitable” that criminal gangs would take advantage of the system, said Tanveer Qureshi of TQ Legal. “Agents accounted for around half of claims under the Jobs Retention Scheme,” he said. “Details of these agents were likely to have been stolen, allowing fraudsters to claim large amounts under the guise of legitimate organisations.”

HMRC published the names of claimants as required by the November Treasury Direction after the matter was raised by the National Audit Office in a report into the CJRS published in October. The public spending watchdog said HMRC “could have done more” to make clear to employees that they were part of a furlough claim.

Will the CJRS list make businesses think twice?

Industry experts said many businesses would think twice about accepting the cash upon knowing their application would be made public. The scheme cost taxpayers more than £46bn last year, and almost 10 million jobs, from 1.2 million different employers around the country were furloughed.

Questions remain about the 700,000 figure, but Susan Ball from RSM said the number does indicate a drop from the peak of the scheme. “This is partly due to some larger companies no longer needing to claim the grant, and many of these have now paid the money back. 

“The reduction in the number of companies claiming also suggests that the Chancellor’s plan to publish the names of those using the scheme in order to reduce fraudulent claims is working.”

However, Upcraft doesn’t think the list in its current iteration will make people feel any differently, “after all its ‘claim and name’ not ‘name and shame’. The alternative to furlough was making people redundant who will now be on Universal Credit, after all.”

None of the Big Four appear in the data, which does not include employers with a successful or pending application to have their details withheld or those who repaid the whole grant before the list was produced.

Employers can be excluded from if they can convince the government after making representations to the government over potential repercussions from having data made available.

What’s next for the furlough data?

From February, the Treasury will also publish an indication of the value of the claim within a banded range, and the company number. Banded ranges start at £10 to £10,000 up to £100m and above.

Employers who started to claim in March 2020 and intend to continue until March 2021 will have their details published for grants covering December 2020 to March 2021.

HMRC will increase its efforts on fraud prevention in February, as individual employees will be notified on their personal tax account with HMRC if a claim has been made for them – although the employee wouldn’t know the value of the claim.

“These details will enable those who have already blown the whistle to HMRC to check what has actually been claimed for them. Employees who do not believe this correlates can either raise it with their employer or call HMRC’s whistleblower’s hotline,” said RSM’s Ball. 

Replies (18)

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By AndrewV12
29th Jan 2021 10:09

Extract above
‘A magnet for fraudsters’
The furlough scheme, which pays a percentage of an employee’s wages if they are unable to work because of a Covid-19 lockdown, generated controversy last year when it emerged many large and multinational corporates were using the scheme despite remaining profitable.

Never trust big business.

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By k743snx
29th Jan 2021 10:21

So couldn't some bright spark see this coming when the scheme started?

Maybe all FTSE-indexed companies should automatically have been excluded from claiming - that would have helped.

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Replying to k743snx:
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By Ian McTernan CTA
29th Jan 2021 10:56

Why? Just because they are bigger doesn't mean they didn't need to furlough people or need the money to aid cash flow.

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Replying to Ian McTernan CTA:
By k743snx
29th Jan 2021 11:34

Fair comment - note my use of the word "maybe".

I do actually get a whiff of big-business bashing in all this. Is the author trying to imply something, I wonder?

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Replying to k743snx:
RLI
By lionofludesch
29th Jan 2021 15:46

k743snx wrote:

So couldn't some bright spark see this coming when the scheme started?

Maybe all FTSE-indexed companies should automatically have been excluded from claiming - that would have helped.

All that would've happened is that there would've been massive redundancies.

Big Business PLC wouldn't have kept their staff on and shouldered the cost. Let's not forget that the target of the relief was to support the run-of-the-mill employees.

The assertion that companies of whatever size have claimed fraudulently does not invalidate the CJRS.

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By Echo761
29th Jan 2021 10:21

Is this posting of business names by HMRC not a breach of data protection? I guess they get round it by the line in the application (which you cannot get around) that you agree to being named... seems out of balance to the taxpayer.

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Replying to Echo761:
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By Hugo Fair
30th Jan 2021 16:52

I presume you're just being flippant ... given that all the core principles of Data Protection (both under the original UK Act and the more recent GDPR) are entirely related to "personal data". So, whilst publishing a list of business names could fall foul of a whole host of other legislative areas, it won't trouble DP officers.

[Note: the "business names" published are whatever 'name' the employer used when setting up their PAYE scheme].

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By Justin Bryant
29th Jan 2021 10:57

I can almost guarantee that for reasons that should be very obvious indeed for any half decent accountant all the above accounting firms will show very healthy profits for this year thanks to the taxpayer.

Then again, if it was good enough for bankers back in 2008/09...

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Replying to Justin Bryant:
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By Ian McTernan CTA
29th Jan 2021 10:58

Unless they weren't charging clients for the additional work or had a lot of clients who couldn't pay or had a lot of staff doing overtime to cover for those self isolating/on furlough.

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By Ian McTernan CTA
29th Jan 2021 11:02

This is no great surprise. Certain sectors are currently pretty much closed, so if, for example, you have a 'small retail' section within your firm it's likely that they don't have as much work to do and some staff may be furloughed.

Yes, there will have been some fraud, but that needs to be looked at in the wider context of what would have happened if the scheme had not been put in place so quickly.

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Replying to Ian McTernan CTA:
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By geoffmw1
29th Jan 2021 13:35

Surely if any accountant thinks that a client or some business they deal with has made a fraudulent claim an AML report would be required

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By ollieacca
29th Jan 2021 12:22

I think what a lot of these headline pieces forget is that sometimes the furlough scheme is being used in the employees interest, for example where they have no childcare options. It would be unfair to expect businesses to pay wages of these people who can't work, but using the scheme the employer is contributing a small amount and hopefully back into their jobs longer term.

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Morph
By kevinringer
29th Jan 2021 13:00

We've been busier than ever this year and had so much covid work to do, we needed this SA easement. But I guess it depends which sector the accountancy practice specialises in. If it's tourism, hospitality or leisure, clients won't have the money to pay the bill, so there won't be any work for the accountant.

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By lukeoliver
29th Jan 2021 13:53

Whilst there will always be some who abuse the system, most try their best. There are also some employees who try to take advantage of the scheme as well but that does not get mentioned.

Employers and Payroll Bureaus have had a difficult and stressful task operating at times a complicated system. This system was largely put in place because the UC could not cope and it is the employees who are the main beneficiaries.

Perhaps the Government / HMRC could express some thanks to Employers rather than indicating they are all being watched carefully.

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By Barbara G
29th Jan 2021 17:56

It's not only accountants who work in accountancy businesses, there are other ancillary staff as well. If we're being asked to work from home we won't need an office cleaner, or the receptionist who files paperwork for example. So what do we do, make them redundant, or utilise the furlough scheme to retain their jobs until a time when we can re-open the offices again?

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By AnnAccountant
29th Jan 2021 18:30

Anyone noticed that wait times on helplines has plummeted? They say "because of Covid", they have had to furlough half the call centre.

Just so happens that doing so saves the company a load of money. I bet if it cost them money, they'd find a way to keep the same number of phone lines open.

I bet customer service levels never return. After a year, we are conditioned to waiting an hour in a queue

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By Matrix
30th Jan 2021 08:21

Of course the employee won’t have access to the amount claimed for them, this information is not submitted on a claim. There is just one number per CJRS claim.

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Replying to Matrix:
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By Hugo Fair
30th Jan 2021 15:24

Possibly true where the claim is for fewer than 100 employees (I don't know because I only have larger clients) ... but the claim 'form' (which must be used when > 100) has a column for "Employee claim amount" that needs to be completed for each line (i.e. each employee).

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