The Coronavirus Job Retention Scheme has reportedly cost the Government £35.4 billion since it was launched earlier this year. HMRC has now confirmed it estimates five to 10 per cent of that money (amounting to up to £3.5 billion) may have been paid out incorrectly either as a result of error or, in some cases, due to fraud.

Since its inception, the CJRS has gone through several iterations, each with different Treasury Directions and guidance. Accordingly, the rules have not always been straightforward to follow. Legitimate mistakes may have been made, but there is an opportunity to correct errors and employers are strongly encouraged to check their claims.

Some 27,000 "high risk" claims are currently under review and numerous arrests have been made in connection with fraudulent furlough claims.

According to HMRC First Permanent Secretary and chief executive Jim Harra, HMRC will not "set out to try to find employers who have made legitimate mistakes" on the basis that the CJRS is "obviously something new that everybody had to get to grips with in a very difficult time". HMRC's key focus will be tackling abuse and fraudulent use of the CJRS. However, all employers will be expected to check their claims and to repay any excess monies claimed.

We are therefore advising all organisations to expect furlough claims to be scrutinised and to keep a clear audit trail of claims made, so that this can be provided to HMRC if required. Where employers believe errors have been made, they have an opportunity to correct mistakes and are advised to do so as soon as possible. HMRC has published errors and penalties guides which set out how mistakes can be rectified, both where the organisation continues to use the CJRS, and where no further claims are being made.

  • Rebecca Fox is a partner at award-winning law firm VWV, which has offices in Clarendon Road, Watford