First arrest made in relation to furlough fraud

09 July 2020

HMRC has confirmed that  a 57-year-old male from Solihull has been arrested in connection with suspected fraud of the Coronavirus Job Retention Scheme (CJRS).

The arrest was made on Wednesday 8 July in connection to a suspected £495,000 fraud of the CJRS. HMRC has confirmed that this is the first arrest of this nature to take place. The individual was also arrested in relation to suspected multi-million pound tax fraud and alleged money laundering offences.

In addition to this, eight more men have been arrested, from the West Midlands as part of a linked investigation. More than 100  HMRC officers were deployed to 11 locations, and computers and other digital devices were seized, in addition to business and personal records.

The media reported that acting director of the Fraud Investigation Service at HMRC, Richard Las, said:

 “The Coronavirus Job Retention Scheme is part of the collective national effort to protect jobs. The vast majority of employers will have used the CJRS responsibly, but we will not hesitate to act on reports of abuse of the scheme.

This is taxpayer’s money and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding.

As usual, we have built steps in to prevent mistakes and fraud happening in the first place, but anyone who is concerned that their employer might be abusing the scheme should report it to HMRC online.”

To date, over £27.4 billion has been claimed through the CJRS, and this has supported 1.1 million employers and 9.4 million furloughed jobs.

CIPP comment

HMRC has continuously reiterated the fact that it has the powers to tackle abuse of the CJRS, and this just serves as an example of the penalties associated with the fraudulent operation of the scheme. There may be many more cases of this nature over the coming weeks and months.

The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.