13,775 whistleblower reports have now been received by HMRC about fraud against the furlough scheme as people report their employers, and ex-employers, City lawyers have told City A.M.
HMRC is now stepping up its enforcement activity with a view to recovery, issuing penalties and pursuing prosecution or directors disqualifications where appropriate.
There were many complex and changeable rules surrounding furlough, so error as well as fraud are known to have been commonplace, explained legal experts from law firm Pinsent Masons.
For example, this could include instances when it considers businesses were claiming furlough but telling, or allowing, employees to keep working.
It could also include instances where a past fraud has been uncovered but the business has not come forward to rectify the position.
The sheer number of furlough claims at the height of the pandemic – and the need to make the payments immediately – made it very difficult for HMRC to spot fraudulent claims.
However Andrew Sackey, Partner at Pinsent Masons, said HMRC has since added a significant amount of resource to its investigation teams to pursue fraudulent or inaccurate furlough claims.
As part of a process of encouraging whistleblower reports from employees, HMRC has deliberately made information about whether an employer has made a furlough claim available online.
Employees are increasingly using this information to make fraud reports through HMRC’s digital reporting service.
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