5-10% of Furlough payments were incorrect…

HMRC’s permanent secretary, Jim Harra yesterday told the Public Accounts Committee he estimates 5-10% of furlough cash has been incorrectly paid out. This equates to anything between £1.7 – 3.54 billion, given that the scheme has so far cost the Government £35.4 billion. That total will still rise before the scheme is withdrawn at the end of October.

Harra, told MPs: “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.”

We’ve mentioned before that the window to review and correct errors is a limited one. Employers have until the 20th October to advise HMRC of the error, which can be repaid without penalty.

The focus, according to Harra, will be on finding those claimants who deliberately abused the system or made fraudulent claims. Legitimate errors will be excused, as Harra accepted these were likely to have arisen ‘because this is obviously something new that everybody had to get to grips with in a very difficult time’.

SO, as long as you can prove that you made every effort to do things properly, you should be fine. This means:

  1. Keeping all of your records.
  2. Double checking you gave the correct information to your payroll processor, whether internal or external.
  3. Asking your payroll processor to confirm that they have double checked everything, either before submission or since the announcement of the opportunity to correct by 20th October.

The sum that’s been paid out incorrectly is huge. We’re already hearing of tax increases to pay for the economic support. HMRC are therefore going to come under fire to recover as much of the 5-10% as possible, so there is every likelihood that you will be asked to prove your claims were accurate.

Don’t leave it until then to be sure that you’ll be OK!

If you’re unsure or need to double check anything, please get in touch.

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