COVID-19 EXPERT LEGAL INSIGHTS

The next ethical dilemma: do we pay back furlough? - Kirsty Churm quoted in Personnel Today

21 July 2020

Kirsty Churm, Senior Associate in our Employment Law team, was quoted in Personnel Today on 21 July 2020. Kirsty was commenting on the news that several large retailers have announced plans to pay back the furlough money they previously claimed from the Government during the height of the COVID-19 crisis. Kirsty suggests that there may be more to these decisions than civic duty or good publicity.
 

Government plans in the Finance Bill 2020 to impose tax charges on firms which have miscalculated or misrepresented their furlough claims could have prompted some firms to repay the money so that they don't face additional penalties.

There has been an element of deliberate furlough fraud but some businesses may have just made a mistake with their CJRS applications inadvertently. As things calm down, businesses may be looking at whether it’s worthwhile repaying any incorrectly claimed grant now before the Finance Bill comes in to avoid penalties.”

Without doubt though, reputation is a consideration when deciding whether to pay back furlough or refuse the job retention bonus. Kirsty adds:

Brand image is one of the issues, and there may be a risk of embarrassment they’re trying to avoid."

Particularly if a company has done really well over the last few months, there may be a perception that it’s unfair to have used taxpayers’ funds or people might think you’re using it to increase profit.”

She points to examples in the early days of the furlough scheme when employers such as Victoria Beckham faced a backlash for taking advantage of the support despite huge personal wealth.

You can read the full article in Personnel Today here: The next ethical dilemma: do we pay back furlough?

Further Information

Should you have an queries regarding the issues raised in this article please contact Kirsty or any member of  our employment team.

 

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