It has been revealed that payroll fraud was responsible for £12bn of government losses last year, making up 8 per cent of the total lost in the private sector.
The Annual Fraud Indicator 2016, which is based on research from Portsmouth University, revealed the annual cost of fraud in the UK was as much as £193bn – a much higher figure than previous Government estimates of £50bn.
Private-sector losses were estimated to be as high as £144bn, more than the public-sector figure of £37.5bn – the research included fraud against businesses and individuals.
Procurement is the biggest source of commercial loss
The biggest losses for companies related to procurement: an estimated £127bn. This was said to be down to scams, fake invoices and, in some cases, the awarding of contracts in exchange for bribes.
Mortgage lenders totalled more than £1bn, with 84 fraudulent mortgage cases for every 10,000 home loan applications.
There were an estimated 350 bogus insurance claims a day, including thousands of dishonest motoring claims totalling around £835m, contributing to the sector’s £1.3bn losses.
Cybercrime set to increase
Benefit and tax-credit fraud is estimated to be £2.4bn, while the rise of cybercrime and identity theft is set to continue, up from 3.25m victims last year.
Professor Mark Button from the University of Portsmouth said: “£15bn is lost annually to tax fraud, largely from people and organisations not declaring and under-declaring income.”
Charities are also hit by £2bn per year, the report revealed.
Ensure your payroll department is operating legally
It is down to public and private sector companies to ensure their payroll departments are operating legally, and are making the correct calculations when it comes to tax, National Insurance, or any other deductions made from their employees’ salaries.
The best way to ensure everything is in order is to ensure you hire payroll professionals with the skills and knowledge to make a difference to the department, and this is where Portfolio can help.