£3.5bn in furlough cash wrongly paid out, as HMRC investigates fraudulent claims

Up to £3.5bn has been paid out by the government in error or due to fraudulent claims through the furlough scheme.

HMRC said: “We have a range of measures in place to protect the schemes against abuse from organised criminal attacks, inflated claims and other non-compliance.”

The government body explained that it was not legally allowed to carry out investigations into suspected furlough fraud until the Finance Bill was granted Royal Assent. Now that it has, HMRC has “started post-payment investigations in depth”.

HMRC’s top civil servant, Jim Harra, told the Public Accounts Committee that his staff believe between five percent and 10% of furlough money has been granted incorrectly.

Harra also mentioned that he is aware of an academic study that suggests this figure might be higher.

Harra said: “We are not going to set about trying to find employers who have made legitimate mistakes in compiling their claims, because this is something new that everybody had to get to grips with at a very difficult time.

“We will expect employers to check their claims and repay any excess amounts, but we will be focused on tackling abuse and fraud.”

The latest figures show that the government has paid out £35.4bn to cover up to 80% of people’s wages through the furlough scheme.

Reward Strategy, Credit Strategy’s sister title today hosted it’s Payroll and Reward Conference where former cabinet minister David Lidington explained that the chancellor was very reluctant to continue the furlough scheme.