HM Revenue and Customs (HMRC) have told MP’s on the Public Account Committee it estimates that between 5-10% of furlough cash has been wrongly awarded, with the latest government figures indicating around £35.4bn having been paid out through the scheme, already the upper end of this estimate would leave £3.5bn having been paid out incorrectly.
Since the scheme launched in April of this year up to 9.6 million workers have been furloughed using the Coronavirus Job Retention Scheme (CJRS). Given that recent information from the Office of National Statistics estimates 32.99 million people aged 16 and above were in employment between February to April 2020. This would mean that around 29% of the total UK workforce have been furloughed at one time or another.
What is HMRC’s next move?
HMRC are now in the process of trying to differentiate between where claims have been incorrect as a legitimate mistake and where incorrect claims have been made as a deliberate tax fraud.
The Head of HMRC, Jim Harra has stated that HMRC’s primary focus will be on tackling abuse and fraud and not on seeking out employers who have made legitimate mistakes whilst getting to grips with the new scheme and processes.
Mr Harra also revealed that HMRC’s new hotline for reporting suspected furlough fraud has now received over 8,000 calls and HMRC are now investigating 27,000 “high-risk” claims.
Employers are being urged to check their claims and if they spot any errors to report them to HMRC and pay back any excess money they may have incorrectly claimed.