HM Revenue and Customs (HMRC) is investigating almost 13,000 businesses for possible abuse of the government's COVID support schemes.
The UK tax authority said it is investigating the misuse of the coronavirus business support schemes, as well as possible fraud and other rule breaches.
So far, eight people have been arrested as a result of investigations into fraudulent misuse of the coronavirus business support schemes, including the arrest of a West Midlands man on suspicion of £495,000 furlough fraud.
Other investigations carried out by HMRC relate to the furlough programme, the self-employment income support scheme (SEISS), and the “eat out to help out” scheme.
According to BLM, the firm which uncovered the data as part of a freedom of information (FOI) request, the number of investigations could increase dramatically going forward.
Some 12,828 interventions by HMRC cover the period up to the end of March. The Financial Times, which reported the news first, said that 7,384 of the interventions relate to the furlough scheme, 5,020 to the self-employed programme and 424 to eat out to help out.
Watch: How the UK government furlough scheme is changing
Data obtained by the FT showed that HMRC received 28,444 reports of potential furlough fraud by the start of this month, however, not all of these are expected to lead to investigations.
The chancellor’s furlough scheme is set to end on 30 September, alongside the launch of the kickstart scheme. More than 1 million businesses have used the scheme since it started.
Since March last year the Treasury has paid 80% of furloughed workers' wages up until £2,000 ($2,783). From June this will drop to 70%, and then 60% in September before winding down completely.
It has covered about £65bn worth of company workers’ wages during the COVID-19 pandemic, with 11.5 million workers helped so far.
Economists are expecting dwindling furlough numbers to help keep unemployment down.
HMRC has previously stated that it expects to recover about £1bn of fraudulently or mistakenly claimed furlough money over the next two years.
“As it takes time for HMRC to build a case, it’s unlikely that we’ll see an immediate wave of arrests and prosecutions. However, it’s a case of when, rather than if, given that thousands of interventions are currently under way,” Iskander Fernández, a lawyer at BLM, said.
Meanwhile HMRC, which has about 1,250 staff based in its taxpayer protection task force, said: “We are taking tough action to tackle fraudulent behaviour. We have now opened more than 12,000 inquiries into claimants we suspect may have kept more than they were entitled to. We have also begun a handful of criminal investigations.”
In the March budget, Rishi Sunak pledged to invest £100m in the task force to help deal with fraud and errors relating to COVID-19 business support schemes. He has previously come under scrutiny for leaving the furlough and business loans schemes open to exploitation.
Criminals are believed to have stolen billions of pounds by posing as legitimate businesses.
Watch: HMRC gives update on grants for self-employed