HMRC considering investigation into Frasers Group for abuse of furlough scheme

Sports Direct
Sports Direct store, Oxford Street 2020. © TheIndustry.fashion

Tax officials are considering an investigation into billionaire Mike Ashley’s Frasers Group, which may lead to the Treasury clawing back millions in furlough payments.

The potential investigation comes from allegations that Frasers Group abused the Government’s furlough scheme during the COVID-19 lockdown.

Staff members made complaints to HMRC that they were asked to work while on furlough. If proven this would be a breach of the Government’s Coronavirus Job Retention Scheme rules.

A HMRC source told i newspaper that Ashley’s retail empire, which includes House of Fraser, Flannels and Sports Direct, was one of many names at the top of a “hit list”.

Other retail businesses including Philip Green’s Arcadia, which owns Topshop and Topman, could also face an investigation from HMRC.

The anonymous HMRC source added: “We’re already looking into whether we can claw back some COVID cash from them. If there’s any way we can, we will. So far it’s looking like there is a case for both to answer.”

HMRC reaffirmed that company directors found guilty of abusing the system could face up to 10 years imprisonment and unlimited fines.

Designed to prevent mass redundancies during the coronavirus pandemic, the Government’s furlough scheme paid up to 80% of employees wages, but the rules were clear that furloughed staff must not do any work for their employer.

Ashley came under fire in March 2020, after initially refusing to close his stores during lockdown. Prime Minister Boris Johnson later told Sports Direct boss Mike Ashley to “expect the consequences” if he does not obey the rules.