HMRC estimates 1 in 10 furlough claims may have been fraudulent or paid in error

Businesses may have wrongly claimed up to £3.5bn in furlough payments, HM Revenue and Customs believes.

The UK Government has so far paid out £35.4bn through the Coronavirus Job Retention Scheme to help protect jobs and businesses during the Covid-19 pandemic. The scheme covered up to 80% of an employee’s salary while they were placed on leave due to the impact of coronavirus.

However, HMRC estimates that 5-10% of the total amount may have been claimed fraudulently or paid out in error. It intends to investigate fraudulent claims, HMRC chief executive Jim Harra said on Monday.

Speaking to MPs on the Public Accounts Committee, Harra 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 employers will be expected to check their claims and repay any excess amount, HMRC will focus on tackling abuse and fraud.

It is currently reviewing 27,000 “high risk” cases where officials believe a serious error has been made in the amount an employer has claimed, according to BBC News.

Figures from mid-August show that 9.6 million people had been put on Government-supported furlough, with claims made by 1.2 million employers.