Updated 23rd October 2020
British companies may have fraudulently claimed up to £4 billion intended for furlough workers – with £2 billion being taken by organised criminals – a damning report has found.
The National Audit Office (NAO) estimated that fraud and error on the furlough scheme could have ranged from five to 10 per cent on claims totalling £39.3 billion. Fraud on the first round of the self-employed scheme could have ranged from 1-2 per cent.
Of these, it is ‘almost certain’ that more than half – around £2billion – has been paid to organised criminals posing as legitimate businesses to make claims under the emergency scheme, tax officials have told the NAO.
A fifth of the money wrongly paid out is blamed on error, either by employers or HMRC.
The spending watchdog had praised the government for rolling out support schemes for employees and the self-employed ahead of schedule when COVID-19 forced much of the economy to close down in March.
But the NAO said that under huge pressure to set up the scheme it did not have time to fully test the schemes and as a result the total scale of fraud and error was likely to be considerable.
Around 9.6 million people were put on furlough through the Coronavirus Jobs Retention Scheme, while another 2.6 million were helped through the Self-Employment Income Support Scheme.
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