COVID support fraud: £5 billion paid to self-employed and employers whose incomes did not drop, finds a Public Accounts Committee report
Dame Meg Hillier MP, Chair of the Committee: “Bad actors in British business are running rings around the Revenue”
- Still minimal understanding or action on missing workforce since pandemic
- £4.5 billion lost to fraud and error in job support schemes
- At least £5 billion paid to self-employed and employers whose incomes did not drop
- Monies paid to those who saw no loss of income when several million who needed it received no support
In a report that came out this week, the Public Accounts Committee said HM Treasury and HM Revenue & Customs was “too slow to manage problems in the COVID support design that meant some in “genuine need missed out” and to “tackle fraud and error where support was given that was not actually needed.”
“The extent of error and fraud and unnecessary support was made more disappointing because several million people whose incomes were affected by the COVID-19 pandemic were not eligible under the schemes’ rules,” said the report.
The Committee expressed in a report that levels of unrecovered error and fraud are “far too high”.
“HMRC has had little success recouping the £2.3 billion incorrectly paid to employers who claimed taxpayers’ money for furlough payments for employees who continued to work. The Taxpayer Protection Taskforce is being wound up without recovering the money expected.
“Gaps and lags in HMRC’s data continued to drive the problems with HMRC providing excessive support to some while others who did need it were ineligible under tax rules. HMRC must now send a clear message on recovering fraud through its tax compliance activities and must urgently increase the rate of repayments from those who overclaimed.
“It must quickly address known gaps in its data without imposing excessive bureaucracy on taxpayers, so that large-scale financial interventions ensure all those in need and only those in need get assistance.”
Dame Meg Hillier MP, Chair of the Committee, said:
Bad actors in British business are running rings around the Revenue. Perhaps some of the same companies that were complaining about even the minimal levels of transparency over billions and billions that were paid out in order to save jobs in this country but are now just lost to the public purse, likely forever.
While money that genuinely saved jobs and households was got out admirably quickly, the weak recovery effort will fail to deter potential future criminals. Too many companies claimed that shouldn’t have and now won’t give it back.
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The COVID-19 employment support schemes were implemented quickly at a time of crisis. They provided essential support to many individuals, businesses and the wider economy but at £97 billion, they were costly, find a new report.
According to the Committee’s report, the cost includes an estimated £4.5 billion of error and fraud and at least £5 billion paid during the first year of the schemes to self-employed people and employers whose incomes had not reduced.
“The extent of error and fraud and unnecessary support was made more disappointing because several million people whose incomes were affected by the COVID-19 pandemic were not eligible under the schemes’ rules.”