HMRC enquires into possible bogus furlough claims

7th September 2020

Over 3,000 employers are reported to have been contacted so far by HMRC as it pursues its enquiries into bogus claims for job retention scheme grants for furloughed employees.

The tax department is sending letters to targeted employers that it believes may have made questionable claims, such as where an employee was not eligible to be claimed for, or where furloughed staff carried on working in contravention to the strict no-working rule.

HMRC is asking employers to review their claims to assess whether they may have made a mistake in the claim, or the amount claimed.

Where any grant is repaid within the appropriate time limit stipulated by HMRC, no further action will be taken and no penalties will be imposed.

The tax department is not targeting what it regards as innocent errors, but more those where it believes there may have been an element of fraud.

Agents will receive copies of the letters if they are authorised as the payroll agent.

Speaking to the Commons public accounts committee,Jim Harra, chief executive of HMRC, said that between 5 per cent and 10 per cent of furlough cash may have been wrongly claimed for purposes ranging from “deliberate fraud to error”.

Mr Harra added that HMRC expected to look into about 27,000 “high-risk” claims and may conduct up to 10,000 “one-to-one investigations”.

If you receive any enquiries from HMRC as regards the job retention scheme, please contact a member of our Payroll team.

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