Government officials fear that up to £ 3.5bn from vacation were mispaid due to fraud or error.
HM Revenue and Customs staff estimates that between 5% and 10% cash Job retention scheme went to the wrong places.
HMRC Chief Executive Jim Harrah told MPs yesterday: “For our planning purposes, we have assumed that the error and fraud rate in this scheme could be between 5% and 10%.”
This is the first time that HMRC has publicly reported the level of potential fraud that could have been committed under a job retention scheme. Mirror reports.
Introduced since March, it covers 80% of an employee’s salary up to £ 2,500 per month while his job is inactive due to coronavirus pandemic.
(Image: PA)
But now it is being phased out and will end on October 31, which raises fears of mass layoffs.
The scheme has supported nearly 10 million jobs, many of which are people who would otherwise be fired.
Government Insiders have always admitted that this scheme will have a deadweight, and experts said that some scam was inevitable because it unfolded so quickly.
So far, the government has paid out £ 35.4 billion in cash to the vacation. This means that anywhere from £ 1.75 billion to £ 3.5 billion could have been paid incorrectly.
“This will range from willful fraud to error,” Harra told MPs.
“In our risk assessment, we said that we are not going to try to find employers who made legal mistakes in drafting their requirements, because this is obviously something new that everyone had to deal with in a very difficult time.
“While we expect employers to check their claims and refund any excess amount, we will focus on fighting abuse and fraud.”
He spoke to the deputies of the State Accounts Committee.
Mr. Harrah said academic research has shown that fraud and error rates can even be as high as 10%.
