FIRMS in South Lakeland are being investigated over fraudulent claims for furlough cash.

HM Revenue and Customs has already recovered more than £200,000 from fraudulent claims made by Cumbrian firms during the pandemic.

The Government's Job Retention Scheme paid 80 per cent of the wages of employees after Covid wreaked havoc on the economy.

But several companies have been found to have defrauded the taxpayer with claims for furlough money.

HMRC confirmed that South Lakeland firms were among 41 companies in Cumbria being investigated over fraudulent claims.

In a response to a freedom of information request by this newspaper, HMRC said 11 claims made by firms were being probed.

Across Cumbria HMRC recovered £192,025 from fraudulent claims in 2020-21 and £43,852 last year.

The areas in Cumbria with the most claims under investigation are Carlisle with 14 followed by South Lakeland.

Tim Farron, the Westmorland and Lonsdale MP, said: “These figures are upsetting as I know of so many constituents who weren’t eligible for furlough as they were essential workers, were out of work at the time or were one of the many people such as the newly self-employed, who were excluded from any support.

"I know that local businesses here used that money correctly and honestly but it’s vital that we ensure that across the country the money that was claimed for furlough was claimed honestly and that there is no whiff of fraud.”

HMRC said it identified claims for compliance checks where the amount of the claim was out of step with other information.

The risk that the claim was incorrect may be due to an honest mistake or fraud and the value of recovered grants does not distinguish between error and fraud.  

A spokesman for HMRC said:  “We designed anti-fraud measures into the COVID support schemes from the beginning, and we are taking tough action to tackle fraudulent and criminal behaviour.

"We blocked tens of millions of pounds of claims being paid out in the first place and we are using the full range of our powers to recover incorrectly paid claims.”

Anyone who keeps grant money despite knowing they were not entitled to it faces having to repay up to double the amount they received, plus interest and potentially criminal prosecution.