Over £1 billion of fraudulent or mistakenly claimed furlough cash is set to be recovered over the next two years, HMRC has said.

The announcement comes after HMRC chief Jim Harra said in September last year that the amount of false furlough claims could amount to as high as £3.5bn.

Since the introduction of the furlough scheme in March 2020, more than £60bn has been claimed by employers to protect around 11 million employees.

The Office for National Statistics said around 55% of pub and bar workers remained on furlough in May 2020, suggesting many businesses are operating with minimal staff.

But there has been widespread concern about furlough fraud, with two individuals in West Yorkshire being arrested on suspicion of defrauding the scheme by £3.4m.

A spokesperson for HMRC said: "The furlough scheme has provided a lifeline to millions of people across the UK and fraudulent claims are unacceptable.

"It is taxpayers' money and fraud limits our ability to support people and deprives public services of essential funding."

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