UK businesses pay £1bn of furlough money back to the Treasury
British firms have paid back the government more than £1bn in previously claimed furlough payments, after weathering the Covid recession successfully.
A Freedom of Information request, sent by the Financial Times, revealed that £709m of money claimed through the coronavirus job retention scheme has now been repaid to HM Revenue and Customs by businesses.
Another £319m has been paid back to HMRC, after accounting errors led to some companies over claiming.
A number of prominent companies have reported that they had handed back furlough cash over the past year, including Primark, Games Workshop, Asos, Ikea, Watches of Switzerland and Halfords.
The scheme has seen the government pay out £64bn, up until mid-May, to subsidise workers’ wages throughout the pandemic.
It was originally supposed to last from April 2020 until the end of summer, however it has now been extended until September this year.
Firms in some industries that were not as badly affected by the recession, including construction giants and retail companies with strong online presences, have been under pressure to pay back their furlough payments before giving out bonuses.
JD Group executive Peter Cowgill was recently forced to defend his decision to pay himself a hefty bonus, after the sports retailer claimed £60m in furlough scheme payments.
The economic recovery has also been stronger than expected, with pent up consumer demand being unleashed in the past few months as restrictions were eased.
Hotel Chocolat, for instance, has seen a massive spike in sales since April, leading it to pay back £3.1m in furlough payments.
It comes as Politico today revealed that workers were entitled to temporarily go onto the furlough scheme if they became sick with Covid-19, but that the Treasury tried to suppress this information.
One of the key reasons behind the failure of NHS Test and Trace was that many people refused to self-isolate as they were not offered sick pay.
However, the Treasury reportedly tried to stop people accessing the furlough scheme when they should have been self-isolating to save money.
A senior Treasury official told Politico: “Furlough can be used to cover self-isolation, but HMT [Treasury] are reluctant to say this explicitly in guidance because it could lead to employees being furloughed who do not need to be.”