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.
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.
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.