Over £5.5bn of Covid support funds lost to fraud or error

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More than £5.5bn of taxpayer money from the government’s coronavirus assistance schemes including furlough, self-employed support, and “eat out to help out” was paid out to fraudsters or given out incorrectly.

HM Revenue and Customs acknowledged in its annual report that about 8.7% of the £60bn it paid out under the furlough scheme in the 2020-21 tax year ended up in the hands of organized crime gangs, fraudsters or was awarded erroneously.

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. “HMRC will now be hunting down those who made fraudulent claims, particularly through the Fraud Investigation Service. There will be a wave of civil and criminal penalties, including prison sentences. The Treasury has already clawed back £98m from fraudulent or erroneous Covid claims and a number of arrests have already been made.”

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