HM Revenue and Customs has received more than 4,400 reports of potential fraud related to the Government’s furlough scheme.
The figures, which only cover the period to the end of June, have been released to Business Live by HMRC as the taxman announced the arrest of a man in the West Midlands in relation to a suspected £495,000 fraud.
HMRC was unable to break the national figures down by region or sector, but the inquiry from Business Live was prompted by allegations that a business in the hospitality sector in the South West was abusing the scheme and had been reported.
HMRC is unable to comment on individual complaints or investigations, but has released details of the first arrest in connection to alleged fraud relating to the Coronavirus Job Retention Scheme (CJRS).
It said officers executed a search warrant on July 8 in the Solihull area and arrested a 57-year-old man. Computers and other digital devices were seized, and funds held in a bank account relating to his business have been frozen.
The 57-year-old man was also arrested in relation to a suspected multi-million pound tax fraud and alleged money laundering offences.
A further eight men from across the West Midlands have also been arrested as part of this linked investigation, which involved the deployment of more than 100 HMRC officers to 11 locations. Further computers and other digital devices were seized, plus business and personal records.
Richard Las, acting director, Fraud Investigation Service, HMRC, said: “The CJRS is part of the collective national effort to protect jobs. The vast majority of employers will have used the CJRS responsibly, but we will not hesitate to act on reports of abuse of the scheme.
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“This is taxpayer’s money and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding.”
More than £27.4billion has been claimed through the CJRS supporting 1.1million employers and 9.4million furloughed jobs.
An HMRC spokesperson said: “We’d ask anyone concerned their employer might be abusing the scheme to please contact us. It could be that you’re not being paid what you’re entitled to, they might be asking you to work while you’re on furlough, or they may have claimed for times when you were working.
“Reports can be submitted to us entirely anonymously and everything we receive is assessed and a decision made on the most appropriate course of action.
“We’re not trying to catch people out – if it turns out to be a genuine mistake then we’ll help put it right, and if it’s more serious then we’ll step in.
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Business Live's South West Business Reporter is William Telford. William has more than a decade's experience reporting on the business scene in Plymouth and the South West. He is based in Plymouth but covers the entire region.
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“These reports are just one way that HMRC identifies fraud. Claims are checked and payments may be withheld or need to be repaid if the claim is based on dishonest or inaccurate information. We won’t hesitate to take criminal action against the most serious cases. We do not comment on identifiable taxpayers.”
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Information can be reported via an online digital reporting service. For reporting abuse of the CJRS people should click the “Report tax fraud online” link .
HMRC said it treats its duty of care to those who report fraud as a priority and has a number of mechanisms set in place to ensure the safety of those individuals.
Fiona Fernie, a tax dispute and resolution partner at accounting, tax and advisory practice Blick Rothenberg, said: “The Government now intends to clawback as much money as possible from those whose claims were wrong.
“Nobody who has received these grants should be complacent, the proposals for clawback are not confined to instances where the claim was fraudulent – it applies to cases where there has been a lack of proper care as well. Now is the time to ensure that claims under the CJRS are accurate.”