Over £5.5bn of Covid support funds lost to fraud or error
HMRC seen to recover funds
HM Revenue and Customs have acknowledged that more than £5.5bn of UK Government coronavirus support schemes including furlough, self-employed support and “eat out to help out”, was paid out to fraudsters or paid out in error.
This sum represents almost 9% of the £60bn paid out under the furlough scheme in the 2020-21 tax year which ended up in the hands of organised crime gangs, fraudsters or was awarded erroneously.
The furlough scheme was paid out to 11.5 million workers up to an amount of £2,500 since March 2020. £490m was lost to fraudulent or incorrect claims under the Self-Employment Income Support Scheme, and £70m for the “eat out to help out” scheme set up to support restaurants last summer.
An HMRC spokesperson said the schemes were created quickly to support people in dire need, and had been subsequently strengthened to crack down on fraud.
“The Covid support schemes have helped millions of people and businesses through the pandemic, and the government was clear that the priority was getting money to those who need it as fast as possible,” the spokesperson said.
“The Taxpayer Protection Taskforce is expected to recover £1bn from fraudulent or incorrect payments over the next two years, and work is already under way, with 23,000 ongoing investigations.”
HMRC said it had so far stopped or recovered £840m of over-claimed grants in 2020/21.
Its annual report highlighted an unnamed company where “staff had been threatened with the sack if they didn’t continue working despite being furloughed, even if sick”. Tax investigators recovered £357,000 from the firm.
In another instance, a restaurant with “one eligible employee – the director” claimed the maximum £2,500 a month for several “off-the-book employees”. At the same time the restaurant claimed to be closed it signed up for support under the “eat out to help out” scheme.
