City firm Reed Smith will repay the money it claimed via the government’s job retention scheme, after it emerged that it was furloughing staff despite a double-digit rise in partner profits.
In a statement, the firm said it has notified HMRC that it will be repaying the funds in full. ‘Due to the economic uncertainty caused by the pandemic the firm took a number of prudent measures to limit its financial impact. One of these was limited use of the furlough scheme,’ a spokesperson said.
‘The firm’s use of the scheme was as the government intended – to protect jobs. As per the government’s guidance, the firm’s London office can now re-open and as a result we have been able to bring back the previously furloughed six facilities staff whose job function meant they could not work remotely. Our intention has always been to consider repayment once the office could re-open and our use of the scheme had finished; we will be doing so in full and have already notified HMRC to this effect.’
Reed Smith claimed between £50,000 and £125,000 between December 2020 and April 2021, according to data published by the government. In February, it announced that global revenue had risen to over $1.3bn, while profit per equity partner rose by 16% from $1.3m to $1.5m.
A number of City firms have now repaid the money they received via the job retention scheme after better than expected performances. Freeths, Osborne Clarke, Eversheds Sutherland, DAC Beachcroft, Herbert Smith Freehills, Norton Rose Fulbright and Pinsent Masons are among other firms to repay the funds.