Over £215m of furlough funds repaid to HMRC by employers

Over 80,000 UK companies have voluntarily paid back more than £215 million in furlough scheme payments which they either claimed in error or did not need.

This was discovered by Press Association (PA) news agency by making a Freedom of Information (FOI) request which discovered that by September 15th, HM Revenue and Customs (HMRC) had received £215,756,121 from 80,433 businesses which paid back the tax office the money they claimed under the scheme. Up until the 16th of August, £35.4 billion had been paid out under the scheme.

HMRC said:

HMRC welcomes those employers who have voluntarily returned Coronavirus Job Retention Scheme (CJRS) grants to HMRC because they no longer need the grant, or have realised they’ve made errors and followed our guidance on putting things right.

At the beginning of September, HMRC estimated that £3.5 billion of furlough payments may have been claimed, either through fraud or by employers making mistakes.

At the time, Jim Harra, permanent secretary of the HMRC said:

We have made an assumption for the purposes of our planning that the error and fraud rate in this scheme could be between 5 per cent and 10 per cent. That will range from deliberate fraud through to error.

An amnesty which was introduced via the Finance Bill which received royal assent on 22/07/20 stated that companies who have committed ‘furlough fraud’ now have 90 instead of 30 days to confess what they have done, as the tax office believes that businesses that have taken advantage of the scheme have done so accidentally.

On 26/05/20 Philip Pepper, head of employment and partner at the law firm, Shakespeare Martineau told HRreview how employers can avoid committing accidental ‘furlough fraud’.

On 29/05/20 Rishi Sunak, Chancellor of the Exchequer announced that employers will start having to pay towards the cost of the Coronovarius Job Retention Scheme (CJRS), from September companies must pay 10 per cent and then 20 per cent in October of the 80 per cent of wages the furlough scheme entitles to employees.

 

 

 

 

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Darius McQuaid

Darius is the editor of HRreview. He has previously worked as a finance reporter for the Daily Express. He studied his journalism masters at Press Association Training and graduated from the University of York with a degree in History.