Fraud or Legitimate Error? Coronavirus Job Retention Scheme

HMRC have confirmed this week that another two people have been arrested in connection with a suspected £70,000 Coronavirus Job Retention Scheme (“CJRS”) fraud. These follow the first arrests in July in connection with alleged furlough fraud with a suspected £495,000 unlawfully gained. 

HMRC has paid out more than £35.4bn to date through the CJRS to support 1.2 million employers and 9.6 million furloughed employees and it has been confirmed by the Government that up to £3.5 billion in Coronavirus Job Retention Scheme payments may have been claimed fraudulently or paid out in error. HMRC have stated that it estimates approximately 5-10% of furlough payments have been wrongly made. This ranges from deliberate fraud through to error. 

HMRC have to date received numerous calls to their fraud telephone line and are now looking into 27,000 “high risk” cases where they believe a serious error to have been made in the amount claimed by the employer.  

They have also begun writing to around 3,000 organisations per week that may have claimed too much money through the CJRS, based on the information it holds about them through payroll and their claim submissions and we have started to see clients worry about having received these. However, the Government have advised that they are not going to set out to try and find employers who have made legitimate mistakes in compiling their claims. Although, they will expect for employers to check their claims and repay any excess amounts whilst they focus on tackling abuse of the scheme and fraud. 

Organisations that have made an error in a claim must pay the excess money they have received back to HMRC. They can either tell the body as part of their next online furlough claim, or contact HMRC on 0300 322 9430 to pay the money back. 

Those who have over-claimed a CJRS grant must notify HMRC by the latest of either: 

• 90 days after the date they received the grant they were not entitled to 
• 90 days after the date they received the grant that they were no longer entitled to keep because their circumstances changed 
• 20 October 2020

If you receive a CJRS enquiry letter, please take immediate action to deal with it, including checking if any tax fee protection insurance you have covers professional fees in ensuring you get expert assistance with the enquiry and dealing with HMRC. 

If you do require any further advice or assistance, please contact Gillian Forrest or your usual AAB contact.