According to a report published in Financial Times, HM Revenue & Customs (HMRC) is investigating 13,000 cases of potential fraud and other breaches of rules related to the use of the government’s coronavirus furlough scheme, self-employment income support scheme, and the “eat out to help out” scheme.
Furlough is planned to end completely on 30 September. More than 1m UK businesses have used the furlough scheme during the pandemic, and a cumulative total of 11.5m jobs have been supported by the Coronavirus Job Retention Scheme, according to the latest government estimates. The latest available data showed that 3.4m people were still on furlough at the end of April
These probes have been opened by the HMRC to protect or recover funds that were lost to fraud, tax avoidance and evasion and other breaches of the rules.
HMRC opened 12,828 probes up to the end of March, with the largest proportion (7384) relating to the use of the government furlough scheme. A spokesperson for HMRC said: “It is vital we support businesses to recover by ensuring a level playing field so the majority are not undercut by the few who tried to cheat the system. We are taking tough action to tackle fraudulent behaviour. We have now opened more than 12,000 inquiries into claimants we suspect may have kept more than they were entitled to. We have also begun a handful of criminal investigations.”
Earlier in March, Chancellor Rishi Sunak had announced that Treasury would invest £100m into a specialist task force to tackle fraud across all Covid-19 support packages in the March budget.
Iskander Fernandez, partner and specialist white-collar crime and investigations lawyer at BLM, said, “As it takes time for HMRC to build a case, it’s unlikely that we’ll see an immediate wave of arrests and prosecutions. However, it’s a case of when, rather than if, given that thousands of interventions are currently underway.”
The data, obtained through a freedom of information request by law firm BLM, showed that the majority of the cases were for furlough fraud - with 7,384 cases under investigation. The UK taxpayer has so far paid out £64bn in furlough cash to people who have been unable to work during the pandemic.
