Employers who may have potentially claimed too much money through the Coronavirus Job Retention Scheme are being encouraged to get in touch with HM Revenue & Customs.

HMRC has said it would impose penalties on any organisation or individual that deliberately sets out to defraud the system.

The government has received thousands of reports about fraudulent use of the scheme, while whistleblowing organisations said thousands of employees had contacted them after being asked to break the rules

Several arrests in connection with alleged furlough fraud has already been made.

According to the National Audit Office (NAO), more than £3bn of furlough job protection money could have been stolen by criminal gangs and employers.

The spending watchdog said up to £2bn of taxpayer money may have gone to criminals using fake companies.

The NAO said the scheme was brought in so rapidly in March that “considerable levels of fraud and error” were likely.

But Fiona Fernie, a tax dispute resolution partner at tax and advisory firm Blick Rothenberg, defended the scheme, and insisted that reports from the NAO that because the furlough scheme was brought in rapidly considerable levels of fraud and error were inevitable, “just don’t stack up”.

She said: “The loss of more than £3bn cannot just be put down to how quickly the scheme was brought in; the government were under pressure to do just that.

“Whilst the rapidity with which the scheme was introduced may have caused errors, it didn’t necessarily cause more fraud.”

It would appear that many firms, including some estate agencies, also claimed for workers not on furlough or inflated the money needed.

The NAO, which has already warned about ‘bounceback’ business loan fraud, said nearly one in 10 workers on furlough had been asked to work by their boss.

Fernie said: “It was obvious from the outset that workers put on furlough should not be allowed to work, and it is not clear how taking longer to introduce the scheme would have made any difference. In fact, the longer people have to find out the mechanics of a scheme like this, the longer they have to work out ways of deliberately circumventing the rules.

“That is exactly what criminals and some greedy employers appear to have done.”

Employers can correct any mistake made without fear of a penalty if they notify HMRC and repay the money.

Fernie added: “There could be large amounts of money that firms have claimed in error and I urge businesses who are in any doubt to contact HMRC immediately and raise the issue. If they don’t then what could have been a simple mistake will be looked at as fraud and businesses will be investigated.

“As it was many employers complained about how long it was before they were able to claim and the impact on their businesses; there would have been even more people losing their jobs completely had the scheme been introduced more slowly.”