London pair arrested over suspected £70k furlough fraud

London pair arrested over suspected £70k furlough fraud

The taxman is continuing to crackdown on furlough fraud, arresting two Londoners as part of an investigation into a suspected £70,000 abuse of the Coronavirus Job Retention Scheme.

HM Revenue and Customs attended residential addresses yesterday (September 10) in the Romford and Walthamstow areas of London, where a 43-year-old accountant and a 51-year-old company director were arrested.

Digital devices and business records were also seized.

Terry Braithwaite, assistant director of the 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.

“Anyone who is concerned their employer has abused the scheme should report it to HMRC.”

The 43-year-old male was arrested on suspicion of fraud by false representation, fraud by abuse of position and money laundering before being released under investigation, while the 51-year-old female was arrested on suspicion of fraud by false representation and money laundering.

The first arrest in connection to alleged fraud relating to the furlough scheme was made in July.

HMRC said it had four lines of defence to protect against fraud.

Employees were required to have been on a payroll on or before March 19 to prevent the use of fake employees; claims are only accepted from employers known by HMRC; all claims are assessed in 72 hours; and HMRC has conducted interventions with customers after the money has been paid.

The taxman has paid out more than £35.4bn through the CJRS to support 1.2m employers and 9.6m furloughed jobs.

At the end of May the taxman had received almost 1,900 reports from the public of alleged furlough fraud, with HMRC promising to take criminal action in the most serious cases.

The CJRS is set to run until October, after it was extended by chancellor Rishi Sunak in May, but employers have shared the responsibility of paying for the cost of furloughed employees as of August.

A number of people have contacted FTAdviser with concerns their own bosses, or those of family members, were fraudulently claiming under the scheme. 

In many cases employers were allegedly claiming on the scheme whilst asking their employees to continue working, and in some cases still only paying the 80 per cent salary contribution arranged by the government.

HMRC has pledged leniency to those who make genuine mistakes with their applications, and insisted it was “not trying to catch out” anyone through its penalty process relating to the scheme.

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