HMRC has revealed that they may have paid almost £3.5 billion in furlough scheme money on fraudulent or wrong claims. That means CJRS payments have been claimed fraudulently or paid out in error.
The tax authority told MPs on the Public Accounts Committee it estimates that they have awarded 5-10% of furlough cash mistakenly. Latest data shows the programme has cost the government £35.4bn so far.
The scheme has paid 80% of the wages of workers placed on leave since March, up to a maximum of £2,500 a month.
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In addition, £30bn in tax was lost as a result of taxpayer error and fraud in 2019, says PAC.
However, HMRC said it intends to target individuals who made fraudulent furlough scheme claims. They do not plan to penalise employers who made legitimate mistakes in compiling their claims.
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Commenting on the issue, Jim Harra, Chief Executive of HMRC, said: ‘We have made an assumption for the purposes of our planning that the error and fraud rate in this scheme could be between 5% and 10%. That will range from deliberate fraud through to error.
‘Although we will expect employers to check their claims and repay any excess amount, what we will be focusing on is tackling abuse and fraud.’
