The latest figures show that £35.4 billion has been paid out under the Coronavirus Job Retention Scheme (CJRS), but between 5-10% of that is suspected to have been paid out wrongly, possibly even more, either by error or as a result of deliberate fraud.
Under the CJRS, the government agreed to pay up to 80% of an employee’s salary if their job was affected by the COVID-19 pandemic, and they were placed on furlough leave.
Furloughed employees are not permitted to do any work for their employer. However, it is thought that up to two thirds of employees carried on working, whilst employers still made claims for their wages under the CJRS.
HMRC has said set up a hotline to report furlough fraud and have received over 8,000 calls so far. It is thought 27,000 ‘high risk’ claims are currently being investigated for suspected fraud.
HMRC has confirmed that it is not their intention to go after employers who have made legitimate mistakes, although it expects them to reimburse any overpayments.
Instead their focus will be on those employers who have deliberately abused the system and made fraudulent claims. This is a criminal offence and arrests have already started being made.
Up to 3,000 employers are being contacted each week as part of investigations into claims under the CJRS.
Employers are therefore advised to carefully review the claims that have been made under the CJRS as a matter of urgency, and if innocent errors have been made to take advice as soon as possible to avoid enforcement action being taken.
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