UK’s wage subsidy scheme on track for April roll out
The government’s wage subsidy scheme is on track to be open on schedule as the nation’s top taxman warns it could be targeted by fraudsters.
The Job Retention Scheme sees the government pay 80 per cent of wages, up to £2,500 a month, for employees that have been unable to work during the Covid-19 crisis and have been furloughed.
Jim Harra, permanent secretary and chief executive at HM Revenue and Customs (HMRC), said the system was now being tested by a small number of employers and that it should be open by 20 April so companies are compensated by the end of the month.
Harra said HMRC was aiming for the system to have capacity for 450,000 claims a day, but he did not have an estimate of how much would likely be paid out.
The Resolution Foundation has predicted that payouts could reach between £30bn and £40bn.
Speaking to the Treasury Select Committee today, Harra added that the vast amounts of money being paid out meant the scheme would likely be targeted by organised crime gangs.
Harra said a hotline would be set up for whistleblowers to report anyone who is trying to scam the scheme. There will also be a series of background checks for employers trying to make claims.
“We are going to be paying out a vast sum of money in a rapid period of time,” he said.
“Any scheme like this is a target for organised crime. Any scheme that pays out I’m afraid attracts criminals that want to defraud it and people that are genuinely entitled to it who inflate their claims.
“We believe we are striking the right balance between protecting the exchequer for that kind of outcome and the importance to get help out in a very short period of time.”
Chancellor Rishi Sunak said at today’s press briefing that there was a chance of fraud, because the government was “designing the schemes at pace”.
He added that he hoped design decisions would “minimise the risk of fraud”.
Harra said there would be some “hard cases” of businesses not qualifying for the scheme, such as anyone who started a new job after 28 February.
The Treasury Select Committee sent a letter to Sunak to ask for the scheme to be changed so people who have changed jobs after that date can apply.
One option these people have is to ask to be rehired by their former employer and be furloughed by them.