Almost 1,900 reports of furlough fraud to HMRC

HMRC said 8.7m employees have now been placed on furlough since the scheme began
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The government has received almost 1,900 reports of fraudulent use of its furlough scheme, according to new figures from HMRC.

As of 29 May, HMRC had received 1,868 reports to its digital reporting service. This is more than double the number of reports it received as of 12 May, at 795.

Whistleblowing organisations have also reported thousands of calls from employees claiming they have been asked to work while on furlough, which is against the rules.

The department will now assess the reports and decide on next steps.

HMRC has also just published draft details of changes to the Finance Bill 2020 that will give it powers to hold directors liable for tax charges if they deliberately flouted the rules of the Coronavirus Job Retention Scheme.

The draft tax information and impact note said HMRC would have “powers to make a company officer jointly and severally liable for the Income Tax charge raised in relation to any CJRS payment to which the company was not entitled or any CJRS payment which was never intended to be used to pay furloughed employee costs in certain circumstances”.

“These powers apply where HMRC can meet certain tests showing there is a serious risk that the company will be unable pay the Income Tax assessment,” it added.

Last week chancellor Rishi Sunak announced that the furlough scheme would begin to wind down over the summer months, with employers beginning to pay employers’ national insurance and pension contributions from 1 August.

The number of employees to be placed on furlough since the scheme began is now 8.7 million, across 1.1 million employers, according to Treasury figures issued yesterday.

A HMRC spokesperson said that fraudulent claims for furlough limit the government’s “ability to support people and deprive public services of essential funding”.

“We’d ask anyone concerned their employer might be abusing the scheme to please contact us. It could be that you’re not being paid what you’re entitled to, they might be asking you to work while you’re on furlough, or they may have claimed for times when you were working.”

“These reports are just one way that HMRC identifies fraud. Claims are checked and payments may be withheld or need to be repaid if the claim is based on dishonest or inaccurate information. We won’t hesitate to take criminal action against the most serious cases.”

Claims to the reporting service can be made anonymously online – HMRC has temporarily had to stop taking reports over the phone.

The spokesperson added: “We’re not trying to catch people out – if it turns out to be a genuine mistake then we’ll help put it right, and if it’s more serious then we’ll step in.”

HMRC does not break down the figures into types of organisation or any further identifying data.

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