The Low Incomes Tax Reform Group (LITRG) has welcomed HMRC’s announcement that the tax authority are setting up an online 'whistle-blower' service for workers to use to report employers who abuse the system.
Worrying reports that LITRG is receiving into its website from workers suggest that the whistle-blower service is urgently needed to avoid abuse of the scheme.
Victoria Todd, Head of LITRG, said:
“We have been calling for this kind of measure and are pleased that HMRC have responded with their new service.
“Reports we are receiving from workers indicate to us that there are a number of employers out there who are asking their staff to carry on working, even though they have been placed on 'furlough'.
“More worrying still, it seems there are some employers who intend to claim the grant but who then have no intention on paying it over to their employees.
“HMRC have the right to audit claims retrospectively but that happens after the wrongdoing has already occurred and is too late to avoid hardship to employees who have gone without pay.
"LITRG is also concerned to hear of employers inserting 'claw back' provisions in employee furlough agreements to try and protect the employer should HMRC ask for grant to be repaid (or, indeed, to cover the cost of paid-out wages if they are unsuccessful in claiming support through the Job Retention Scheme in the first place).
“A reporting facility that is set up before any grants are paid is a vital safeguard. A quick and easy to use, well-publicised, specific, Job Retention Scheme whistle-blowing online service for workers to use will act as a deterrent to abusive behaviour and will help HMRC ensure they are only paying employers who are following the scheme rules.
“We await further details from HMRC to help us get the message out to workers that the hotline exists.”
Notes for editors
Low Incomes Tax Reform Group
The LITRG is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.
The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. The CIOT’s 19,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.
Contact CIOT External Relations on 0207 340 2702 / Out of hours contact: George Crozier, 07740 477 374.