“I thought I would record a follow-up vlog to my last recording on furlough fraud which was back in June, how time flies.
You may recall in my last vlog, I mentioned that HMRC had started to investigate fraud of the scheme given the huge and unprecedented amounts of money being provided to employers.
Well, Mr Jim Harrar, the Chief Exec of HMRC, has again been reporting to the public select committee. When asked about the level of fraud and errors, Mr Harrar indicated that it could be in the region of 5-10% although one study found it to be much higher, and that the national audit office had recent undertaken their own survey which would be published shortly.
He advised that HMRC are looking into 27,000 high risk cases and had received over 8,000 reports to their fraud hotline.
So, let’s put that into perspective, around £35bn has been claimed so far and 10% is £3.5bn. Now, you can understand why HMRC are going to be looking into employers claims for some time to come.
Mr Harrar appreciated that the scheme was new to everyone and honest mistakes can and will have been made however, he also expected employers to check their claims and repay any errors. Whilst HMRC would be looking to focus on employers who had abused or made fraudulent claims, it’s inevitable honest mistakes will be found by HMRC and if employers haven’t reviewed their claim this could lead to fines and penalties.
As the scheme starts to unwind and finish, it’s expected that there will be more errors not less, as the support is gear down from 80% to 70% and then 60% and the calculations become a little more complicated with part-time claims.
It may also be worth mentioning a question I often get asked which is, ‘will the scheme be extended post October, most noticeably for certain sectors such as hospitality or for areas in local lockdowns?’
Whilst there are advocates of either extending the scheme or replacing it with a cheaper option, there has been no indications of that and even one of the Bank of England’s chief economists has even warned against it, noting it’s just prolonging the inevitable, which is large jobs losses.
Just to finish, please ensure you have reviewed your furlough claims and if you have any questions then just ask.”
If you have any questions or concerns regarding the CJRS you should not hesitate to contact your usual engagement partner.