Two arrested on suspicion of £70,000 furlough fraud

An accountant and a company director from east London have been arrested on suspicion of £70,000 furlough fraud following an HMRC investigation

HMRC officers attended residential addresses in the Romford and Walthamstow areas of London where the man and woman were arrested.

Digital devices and business records were also seized as part of a probe into the use of the government’s coronavirus job retention scheme (CJRS).

Terry Braithwaite, assistant director, Fraud Investigation Service, HMRC, said: ‘The CJRS is part of the collective national effort to protect jobs. While most employers have used the scheme responsibly, this is taxpayers’ money and HMRC will not hesitate to act on reports of abuse of the scheme.’

Earlier this month HMRC CEO Jim Harra told MPs that up to £3.5bn in furlough payments made under the CJRS may have been claimed fraudulently or paid out in error.

Giving evidence to the public accounts committee, Harra said the department estimated that between 5% and 10% of furlough payments might be incorrect.

Harra also said 8,000 calls have been received to HMRC's fraud telephone hotline, while HMRC is now looking into 27,000 ‘high risk’ cases where it believes a serious error has been made in an employer’s claim.

The furlough scheme began in March, offering up to 80% of an employee’s pay to a maximum of £2,500 per month.  It is now being wound down, with employers expected to pay an increasing proportion of the monthly grant from August, and is set to finish at the end of October.

So far HMRC has paid out more than £35.4bn through the CJRS to support 1.2m employers and 9.6m furloughed jobs.

If a business has overclaimed a CJRS grant and have not repaid it, they must notify HMRC by the latest of these three dates or risk paying a penalty:

  • 90 days after the date they received the grant you were not entitled to;
  • 90 days after the date they received the grant that they were no longer entitled to keep because their circumstances changed; or
  • 20 October 2020

Useful links:

Information on CJRS under or over payment

Information on reporting fraud to HMRC

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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