HMRC says up to £3.5bn furlough claims fraudulent or paid in error,
Corona cases increase, social gatherings above six banned in England from Sept 14
Nation special report
LONDON: Covid-19 has not only devastated the social system, caused heavy fatalities but also upheaval the financial aspects in Britain resulting the unbelievable fraud in government’s ‘Furlough scheme’. It is learnt that up to £3.5bn in Coronavirus Job Retention Scheme payments may have been claimed fraudulently or paid out in error, the government has said. HM Revenue and Customs told MPs on the Public Accounts Committee it estimates that 5-10% of furlough cash has been wrongly awarded.
Latest data shows the programme has cost the government £35.4bn so far. The scheme has paid 80% of the wages of workers placed on leave since March, up to a maximum of £2,500 a month.
According to a BBC report, speaking to MPs on Monday, HMRC’s permanent secretary, Jim Harra, said: “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.”
The Public Accounts Committee estimates that a total of £30bn in tax was lost in 2019 due to taxpayer error and fraud. Both HM Treasury and HMRC were ordered to appear in front of MPs to explain how they were intending to reduce the problem.
“What we have said in our risk assessment is we are not going to set out to try to find employers who have made legitimate mistakes in compiling their claims, because this is obviously something new that everybody had to get to grips with in a very difficult time,” said Mr Harra.
So far, 8,000 calls have been received to HMRC’s fraud telephone hotline. HMRC is now looking into 27,000 “high risk” cases where they believe a serious error has been made in the amount an employer has claimed, he added.
Mr Harra advised that any employee who feels that their employer may have been fraudulently claiming furlough money can report it to HMRC by filling in a form on its website.
“We are continuing to support livelihoods and incomes through our Plan for Jobs to ensure that nobody is left without hope or opportunity. This includes a £1,000 retention bonus for businesses that can bring furloughed employees back to work,” he said.
“We are also creating new roles for young people with our Kickstart scheme, creating incentives for training and apprenticeships, and supporting and protecting jobs in the tourism and hospitality sectors through our VAT cut and last month’s Eat Out to Help Out scheme.”
Boots, John Lewis, Marks & Spencer, Zizzi owner Azzurri, and furniture retailer DFS were among the household names to announce redundancy plans in July. A survey found that one in three firms expected to make some staff redundant between July and September.
Meanwhile, British employers planned more than 300,000 redundancies in June and July, as the coronavirus outbreak took its toll on the workplace. 1,784 firms made plans to cut nearly 150,000 jobs in July, almost a sevenfold increase on July 2019.
The figures were obtained by a BBC Freedom of Information request.
In June 1,888 employers filed plans for 156,000 job cuts, a sixfold increase on the previous year. The coronavirus lockdown and the resulting record-breaking economic downturn closed restaurants and shops and brought travel to a standstill, forcing many firms to cut staff.
A spokesman for the government stressed that it had already protected 9.6 million jobs through the Job Retention Scheme, as well as paying out billions in loans and grants to thousands of businesses.
The law change will ban larger groups meeting anywhere socially indoors or outdoors, the government said. But it will not apply to schools, workplaces or Covid-secure weddings, funerals and organised team sports.
It will be enforced through a £100 fine if people fail to comply, doubling on each offence up to a maximum of £3,200.
The new rules – which come into force on 14 September – mark a change to England’s current guidance.
At present, the guidance says two households of any size are allowed to meet indoors or outdoors, or up to six people from different households outdoors. Until now the police have had no powers to stop gatherings unless they exceeded 30.
There are some exceptions to the new rules. Households and support bubbles bigger than six can socialise together – but not with anyone else at the same time – and gatherings can be more than six if it is for work or education purposes.
Social gatherings of more than six people in England will not be allowed in law from Monday 14 September
The new rule applies to people in private homes, indoors and outdoors, and places such as pubs, restaurants, cafes and public outdoor spaces
It applies to all ages
The rule does not apply to schools and workplaces, or weddings, funerals and organised team sports
A full list of exemptions is due to be published before the law changes
People who ignore police could be fined £100 – doubling with each offence to a maximum of £3,200
Prime Minister Boris Johnson has ordered a major crackdown led by police, councils and health officials to stop continuing breaches of social-distancing guidance in an attempt to prevent a second wave of Covid-19 and save lives.
Venues that are linked with local outbreaks will be closed, restaurants and pubs fined if they fail to comply with contact tracing, and unlawful parties staged by young people broken up by police officers who will fine participants.
Local curfews, mirroring a new 10pm to 5am closure of venues in Bolton, are being held in reserve for other towns where local transmission rates are high, although these are not expected to be the focus of the announcements.
The legal cap replaces confusing guidance and means police will have the power to close down big parties, such as gatherings at student houses when the new university term begins.