Two arrested in £70k furlough fraud investigation

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Two people in London have been arrested in connection with a suspected £70,000 Coronavirus Job Retention Scheme fraud.

Following an investigation by HM Revenue & Customs, a 43-year-old male accountant from Romford was arrested on suspicion of fraud by false representation, fraud by abuse of position and money laundering.

A 51-year-old female company director from Walthamstow was arrested on suspicion of fraud by false representation and money laundering.

Both have been released under investigation and digital devices and business records have been seized.

Terry Braithwaite, assistant director, Fraud Investigation Service at HMRC, said: “The CJRS is part of the collective national effort to protect jobs. While most employers have used the scheme responsibly, this is taxpayers’ money and HMRC will not hesitate to act on reports of abuse of the scheme.”

HMRC has paid out more than £35.4bn through the CJRS to support 1.2 million employers and 9.6 million furloughed employees.

It estimated that up to £3.6bn in furlough payments have been claimed in error or fraudulently and has been looking into 27,000 “high risk” cases where it believed organisations had claimed too much money under the scheme.

On Monday, HMRC permanent secretary Jim Harra 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% and 10%. That will range from deliberate fraud through to error.”

The first arrests in connection with alleged furlough fraud were made in the West Midlands in July, in connection with a suspected £495,000 fraud.

HMRC has begun writing to around 3,000 organisations per week that may have claimed too much money through the CJRS, based on the information it holds about them.

Organisations that have made an error in a claim must pay the excess money they have received back to HMRC. They can either tell the body as part of their next online furlough claim, or contact HMRC on 0300 322 9430 to pay the money back.

Those who have over-claimed a CJRS grant must notify HMRC by the latest of either:

  • 90 days after the date they received the grant they were not entitled to
  • 90 days after the date they received the grant that they were no longer entitled to keep because their circumstances changed
  • 20 October 2020.

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