Monday 21 September 2020 10:27 am

Businesses voluntarily return £215m in furlough cash

UK firms have voluntarily returned more than £215m of furlough money to the government either because they did not need it or they took it in error.

HM Revenue & Customs (HMRC) figures released today showed that 80,433 employers have so far returned furlough cash totalling more than £215m handed to them to cover staff salaries during the pandemic.

Read more: Around 5m workers were furloughed in July amid uneven recovery

However, the returned money makes up a slim portion of the total £35.4bn claimed under the Coronavirus Job Retention Scheme (CJRS) up until 16 August, according to the latest figures. 

HMRC added that an estimated £3.5bn may have been paid out in error or to fraudsters taking advantage of the scheme, according to documents obtained by the PA news agency through a freedom of information request.

Under the furlough scheme introduced in April, employees placed on temporary leave during the pandemic received 80 per cent of their pay, up to a maximum of £2500 each month. 

At first, the cash was paid to workers by the government in a bid to prop up the UK economy as businesses ground to a halt during the coronavirus crisis. However, employers now have to contribute to wages, with the scheme due to wind down on 31 October.

So far, the scheme has helped more than 1.2m employers across the UK furlough 9.6m jobs.

HMRC today said it “welcomes those employers who have voluntarily returned CJRS grants to HMRC because they no longer need the grant, or have realised they’ve made errors and followed our guidance on putting things right”.

Housebuilders Redrow, Barratt and Taylor Wimpey said they have returned all the furlough cash they initially claimed. Other business giants including Ikea, Games Workshop and distribution firm Bunzl have also voluntarily returned CJRS payments.

British high street titans Primark and John Lewis have both said they will not claim the £1,000 bonus firms can claim under the CJRS for each furloughed employee returned to work and kept employed until the end of January. 

It comes as the government last week doubled down on its decision to scrap the furlough scheme at the end of next month, despite calls from major industry figures to extend support.

Earlier this month the CBI said a replacement scheme was needed to avoid a “cliff edge” in the UK.

Read more: UK unemployment: Experts say job losses to jump as furlough ends

Manufacturing body Make UK meanwhile urged the government to extend the current scheme, noting that similar programmes in Germany, Belgium, Australia and France are all being extended or replaced with fresh wage support schemes into the new year.

Prime Minister Boris Johnson has repeatedly refused to extend the CJRS scheme, arguing that it would keep people “in suspended animation”.

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