Furlough Fraud: Update

Government minister says HMRC is working on planning assumption of 5-10% error and fraud rate.

In July we wrote an article, 'Furlough Fraud', about mis-use of the Coronavirus Job Retention Scheme (the 'Scheme') with reports that some employers were claiming funding whilst their employees continued to work for them, potentially in contravention of Scheme rules.

On 7 September, HMRC's permanent secretary told the Public Accounts Committee that HMRC was looking into 27,000 'high risk' cases where serious errors in claims or fraud had potentially occurred. The permanent secretary has also stated that HMRC are working on an assumption of a combined 5-10% error and fraud rate for Scheme payments, which at 7 September put the estimated cost of overpayment and fraudulent claims at up to £3.5bn.