Furlough Fraud: HMRC contacting firms believed to have made furlough claim mistakes

HM Revenue & Customs (HMRC) has started to write to employers it believes have claimed excessive funds through the Coronavirus Job Retention Scheme based on the information it holds about their organisation.

The government has received thousands of reports about the fraudulent use of the scheme, while whistleblowing organisations have claimed to have been contacted by thousands of employees after being asked to break the rules.

Around 3,000 organisations per week will receive letters asking them to check that their claims are accurate and allows employers to correct any potential errors that have been made.

HMRC expects to contact 27,000 organisations in total about anomalies, which is roughly 2 per cent of those that have made claims under the scheme. It has warned that penalties will be imposed on any individual or organisation that deliberately sets out to defraud the system.

The first arrest in connection with alleged furlough fraud was made last month, with a 57-year-old West Midlands man arrested as part of an investigation into a suspected £495,000 CJRS fraud.

Employers can, however, correct any mistake made without fear of a penalty if they notify HMRC and repay the money on time.

The deadline to notify it is the latest of the following:

  • 90 days of receiving the CJRS money they’re not entitled to
  • 90 days of when circumstances changed so that they were no longer entitled to keep the grant
  • 20 October 2020 if they received CJRS money they’re not entitled to, or if their circumstances changed, on or before 22 July.

At AGS HR, we can advise on all aspects of the challenges you may face, such as returning to work, reviewing employment contracts and redundancy considerations, with easy to use documents and practical advice.

For help and advice, contact our expert team at AGS HR Solutions today to discuss your requirements.