Professional services partnerships have begun to come forward over wrongly claimed coronavirus support, according to new data shared exclusively with City A.M. today.
Around 25 professional services partnerships have admitted to overclaiming furlough with the amount totalling £309,588, averaging £12,384 per firm, law firm Pinsent Masons found.
The numbers are likely to increase further as many tax returns are still to be submitted, the firm pointed out. The total amount of Covid support which HMRC estimates to be lost to error and fraud is £5.5bn, 8.7 per cent of the total paid out.
HMRC furlough probes
HMRC has invested significant resources in recovering money lost to erroneous and fraudulent claims.
A dedicated taskforce of over 1,200 staff launched earlier this year and is currently investigating 23,000 cases of suspected fraudulent Covid claims.
As part of its wider campaign against covid fraud and error, the Revenue has included a section on the latest partnership tax return (SA800) form, entitled ‘Incorrectly claimed coronavirus support scheme payments’. This gives firms an opportunity to come forward to disclose any errors in their furlough claims.
Many firms will have made “genuine mistakes” in their applications for furlough and other Covid support schemes, said Andrew Sackey, Partner at Pinsent Masons, as he pointed out that many were forced to make these applications under time pressure while also working out the logistics of working from home in the early days of the pandemic.
“HMRC’s figures make clear that they consider that the amount of incorrectly claimed furlough declared by professional services firms and others to date is likely to be only the tip of the iceberg.”
The fact that the rules of the furlough scheme changed several times is likely to have led to confusion among employers, Sackey added. Modifications were made to the scheme in terms of what proportion of salary firms could claim.
“Many firms were operating under considerable strain at the time they made these applications, being forced to adapt quickly to an unprecedented situation. Some will have subsequently discovered that staff, well-meaning or otherwise, may have worked in breach of the rules, he concluded.