LONDON - An accountant and a company director have been arrested as part of a suspected £70,000 furlough fraud.

The pair, a 43-year-old man and a 51-year-old woman respectively, were arrested by officers from HM Revenue and Customs (HMRC) who attended homes in Romford and Walthamstow, northeast London, on Thursday.

Both are accused of fraud by false representation and money laundering, while the male accountant also faces a further charge of fraud by abuse of position. Each has been released under investigation.

Digital devices and business records were also seized in an operation that took place just days after MPs were warned by HMRC officials that they suspect up to £3.5 billion has been overpaid as part of the Coronavirus Jobs Retention Scheme (CJRS).

The programme covers up to 80% of an employee’s salary if they cannot work and are furloughed because of the Covid-19 pandemic. Terry Braithwaite, assistant director of the Fraud Investigation Service at HMRC, said: ‘The CJRS is part of the collective national effort to protect jobs.

‘While most employers have used the scheme responsibly, this is taxpayers’ money and HMRC will not hesitate to act on reports of abuse of the scheme.’ HMRC has paid out more than £35 billion through the CJRS to support 1.2 million employers and 9.6 million furloughed jobs.

On Monday the department’s chief executive Jim Harra told MPs that civil servants think the error and fraud rate for the furlough scheme could reach between 5% and 10%. (FA)