Ok. So it sounds like he has payroll'd the JRS 80% claim then paid you cash in hand the remaining 20%. If so, even though he's still a scumbag, your net should be correct. In which case there's zero failure to pay tax on your end OP (no tax fraud for you to worry about)
In answer to your question, yes, furloughed employees continue to accrue holiday entitlement in exactly the same way as normal.
Holiday pay, whether the employee is on furlough or not, is calculated the same way.
If the holiday pay you should be getting is higher than the pay received while on furlough (e.g 80% for example), the employer must pay the difference (top up to 100%). Taking holiday does not break the furlough period.
HOWEVER - and I wouldn't normally say this - if your boss will be fraudulently claiming you as furloughed whether you are on "holiday" or illegally working - what skin is it off his nose to let you just keep your holidays?! The audacity of this man!
The lesson here OP is to always always check your pay slips.
If you are self isolating because you are personally sick, the normal SSP rules apply. And you can apply for the self isolation grant. Or you could use your holidays and be paid in full
If it was to care for a child then this time is unpaid, you won't get SSP but can apply for the self isolation grant. Or you could use your holidays and be paid in full.
As you know, you can't claim the grant if you're on furlough.
So your employer is doubly shafting you here - you would have been able to claim the grant AND not waste your holidays if he didn't illegally have you furloughed.
At the end of the day it's your choice how ballsy your are about this. If you don't care about it being all above board (yes I know two wrongs don't make a right) I personally would be fighting back saying how dare he illegally furlough me and then have the nerve to make me use my holidays.