Arrests made in £70,000 furlough fraud investigation
15 September 2020
A 43 year-old male accountant, from Romford and a 51 year-old female company director from Walthamstow have both been arrested on suspicion of fraud by false representation and money laundering. The accountant was also accused of fraud by abuse of position.
The arrests were made in connection with fraud relating to the Coronavirus Job Retention Scheme (CJRS) equalling £70,000. Both individuals have since been released under investigation, but devices and business records have been retained by police.
Personnel Today reported that the assistant director of the Fraud Investigation Service at HMRC, Terry Braithwaite, commented:
“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.”
The Chief Executive and Permanent Secretary of HMRC, Jim Harra, confirmed that it is expected that anything up to £3.6 billion in furlough payments have been claimed either erroneously or fraudulently, and that HMRC is currently investigating 27,000 cases where it is thought that too much money has been claimed by businesses. Statistics reveal that, to date, HMRC has paid out over £35.4 billion through the CJRS which has supported 1.2 million organisations, and 9.6 million furloughed employees.
Mr. 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.”
This is not the first case of arrests being made in connection with suspected furlough fraud. Back in July 2020, arrests were made in the West Midlands in relation to a suspected £495,000 fraud.
HMRC has already started writing letters to approximately 3,000 businesses per week, who are believed to have made claims for too much money through the scheme. This is based on information that HMRC has access to on those businesses.
There has been much focus on the accuracy of CJRS claims, and businesses have been made aware that if they have made an error, any excess money received must be notified and returned to HMRC. This can be done as part of a company’s subsequent online claim or by contacting HMRC directly. Any businesses wishing to claim the Job Retention Bonus (JRB) will need to ensure that their CJRS claims have been accurately submitted and that HMRC has been advised of any amendments, where applicable.
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.