HMRC has written to employers who it believes have overclaimed on the coronavirus job retention scheme (CJRS), demanding they repay payments or face a fine.

HMRC revealed 3,000 employers, out of 1.2 million who have applied for the grant during the COVID-19 pacedmic, that it believes have miscalculated their claim.

The news comes as the tax authority told MPs on the public accounts committee that it estimates between 5% and 10% of furlough money has been wrongly awarded.

The scheme, which was launched earlier this year amid the COVID-19 pandemic, has cost the government around £35.4bn, according to the latest data.

HMRC revealed somewhere between £1.75 billion and £3.5 billion could have been wrongly paid out. It also reported an estimated £30 billion in tax was lost in 2019 due to taxpayer errors and fraud.

HMRC stated:

"We will not seek out innocent errors and small mistakes for compliance action. We will act, however, against anyone who deliberately sets out to defraud the system or claims money they aren't entitled to.

"This was an entirely new scheme and many employers were coping with the most difficult circumstances they'd ever faced. We appreciate mistakes happen, particularly in these circumstances, including claiming too much."

Under the scheme, from 1 March, companies could claim a grant covering 80% of their employees' wages on furlough, subject to a cap of £2,500 a month, reducing to 60% at the start of October and closing on 31 October 2020.

Speak to us about your CJRS claims.

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