A warning has been issued to any company who may have abused the furlough scheme amid the coronavirus pandemic.

Companies are now paying back £1.3billion in furlough payments which has led HMRC to launch an investigation into companies that may have abused the support scheme.

According to leading tax and advisory firm Blick Rothenberg: “HMRC will not hesitate to pursue those who have been abusing the scheme.”

Warning over HMRC investigation

Heather Self, a partner at the firm said: “Some of the repayments will be the correction of errors, but the majority is likely to be businesses deciding to repay funds after finding that they had done better than expected during the pandemic.

“However, there is clear concern from the government about incorrect and potentially fraudulent payments – and HMRC will not hesitate to pursue those who have been abusing the scheme.”

She added: “Companies may have inadvertently claimed for more than they were due or simply made a mistake in their calculations but now is the time to check.

"If companies do discover an error, it is nearly always better to correct it voluntarily before HMRC start to investigate – penalties are lower (and often nil) if the initial disclosure is ‘unprompted’.

"If an investigation is started it could cost companies dearly.”

She concluded: “This is probably the first time that businesses have voluntarily repaid Government funding in such large numbers, often after coming under sustained media pressure, particularly in the case of some retailers.”