Wednesday 9 June 2021 2:38 pm

HMRC set to recover £1bn of fraudulent furlough cash over two years

Over £1bn of fraudulent or mistakenly claimed furlough cash is set to be recovered over the next two years, HMRC has said.

Since the introduction of the furlough scheme in March 2020, more than £60bn has been claimed by employers as it protected over 11m employees.

In the March Budget, the government announced the scheme would be extended until 30 September of this year.

But there have been widespread concerns about furlough fraud. Last month HMRC said a man and woman in West Yorkshire were arrested on suspicion of defrauding the scheme by £3.4m.

Today HMRC official Janet Alexander said authorities will launch a small number of criminal investigations relating to serious fraud.

It comes after HMRC chief Jim Harra said in September that the amount of fraudulent or mistaken furlough claims could amount to as high as £3.5bn.

A spokesperson for the authority said: “The Coronavirus Job Retention Scheme has provided a lifeline to millions of people across the UK and fraudulent claims are unacceptable. It is taxpayers’ money and fraud limits our ability to support people and deprives public services of essential funding.”

“We’d ask anyone concerned that an employer might be abusing the scheme, or anyone with information about suspected fraud, to please contact us online. All information is assessed and the most appropriate course of action taken.”

A significant proportion of people are still on furlough ahead of the proposed 21 June reopening. Some 55 per cent of pub and bar workers remained on furlough last month, according to the latest ONS data published yesterday, suggesting watering holes are still operating with minimal staff.

During the second national lockdown in November 2020, and at peak use of the furlough scheme, 91 per cent of pub and bar staff were on furlough. This compares to between 8 and 15 per cent of staff on furlough in all other businesses during the same period.