Fraudulent furlough claims or those paid in error cost £3.5bn

by | Oct 1, 2020

Up to £3.5 billion in payments made to employers under the furlough scheme might have been fraudulently claimed or paid in error, HMRC has said.

The scheme was launched at the height of the coronavirus pandemic in April 2020 and paid 80% of furloughed workers’ wages, up to £2,500 a month.  

More than £35.4bn has been paid out to around 1.2 million employers, and HMRC estimates between 5% and 10% of that cash has been wrongly awarded.

Finance Act 2020 gave HMRC powers to claw back any payments employers are not entitled to, including grants they have not passed on in wages to furloughed staff.

Employees are being urged to confidentially report employers who are abusing the scheme, with more than 8,000 calls made to a fraud hotline so far.

In addition, HMRC is looking into 27,000 “high-risk” cases where they believe a serious error has been made in the amount an employer has claimed.

The Revenue will contact those employers and offer the opportunity to correct those claims, with around 10,000 employers expected to face further action.

The furlough scheme is scheduled to end on 31 October 2020 and will be replaced by the new Job Support Scheme.

If you wish to speak to a member of our team about the furlough scheme or the new job support scheme please contact us on 020 7330 0000.

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