Coronavirus: Up to £3.5bn furlough scheme claims may have been wrongly paid out

The government believes it may have paid out up to £3.5bn in wrong or fraudulent claims for the furlough scheme.

Jim Harra, the top civil servant at HM Revenue & Customs, said that his staff had calculated for the possibility that from 5% to 10% of the money might have gone to the wrong places.

The government has so far made £35.4bn in furlough payments, according to the latest figures. It means that somewhere between £1.75bn and £3.5bn could have been paid out wrongly.

Mr Harra said HMRC would not be seeking to root out employers who have made legitimate mistakes but will instead be focusing on tackling abuse and fraud.

HMRC expects businesses to check their claims and repay any excess amount.

So far, 8,000 calls have been received to the HMRC's fraud telephone hotline. The 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, according to Mr Harra.

It is the first time HMRC has spoken publicly about the level of potential fraud that could have been committed as part of the job retention scheme.