About £260 million intended to support self-employed people during the pandemic was stolen, tax officials have told MPs.
In the 2020-21 financial year, HM Revenue & Customs said that criminals accounted for a third of the “fraud and error” losses in an income support scheme for the self-employed.
The fraud and error losses in the wage furlough scheme for staff that year was 3 per cent. HMRC told the Treasury committee that 4.6 per cent (£4.5 billion) of the cost of three pandemic support schemes it ran between 2020 and last year were claimed through fraud and error.
Jim Harra, HMRC chief executive, told Harriett Baldwin, chairwoman of the Treasury committee, in a letter that the furlough scheme accounted for £3.5 billion. A further £1 billion was stolen or wrongly claimed from the self-employment income support scheme.
Eat Out to Help Out, introduced by Rishi Sunak when he was chancellor to subsidises the hospitality industry, had about £71 million paid in fraud or error.
Harra said the employment schemes supported in total 14.6 million jobs and self-employed people.
“From the beginning we were clear that the schemes would be targets for fraud and also that customers operating at pace and under pressure would make mistakes: that’s why we designed the schemes in such a way as to minimise fraud and error while not unnecessarily delaying payments,” he wrote.
He said that a task force set up to recover funds expected to yield £1.1 billion by the time it was disbanded — a quarter of HMRC’s fraud and error estimate.
“The most complex cases will take longer and will conclude after transition from the [task force] is completed in September,” Harra said.
“In addition to our compliance activity on the schemes, claimants have also returned around £970 million in grants that they no longer required or where they had identified an error.”
Baldwin said: “While Covid funds were dispersed in a rush, we do expect the full force of the law to fall on fraudsters when they are found.”
TaxWatch, an investigative think tank and charity, has pointed to a lack of “serious consequences” for most people found to have abused the schemes, with civil and criminal penalties levied in few cases. TaxWatch said there was “very little deterrent”.
Why that’s even more than was siphoned off by Baroness Mone of Offshore.
‘The party of fiscal responsibility’. Err yeah right!
I know multiple people who worked for companies that got the employees onto furlough but had them working anyway, essentially carrying on business but having the taxpayer pay their wages instead. I don’t know any self-employed people that did that though, but I’m not surprised there were people abusing that system as well.
SE and I didn’t get a penny because I didn’t have a full years books (went SE sept 2019)
Angers me how so many fraudsters were able to pull money out the system and I was sat there struggling to pay rent
As usual they play the “look at the little crime” card. The tories are responsible for siphoning Billions to their cronies during that period. Why aren’t more questions being asked about that?
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Article contents:
*James Hurley, January 18 2023, The Times*
About £260 million intended to support self-employed people during the pandemic was stolen, tax officials have told MPs.
In the 2020-21 financial year, HM Revenue & Customs said that criminals accounted for a third of the “fraud and error” losses in an income support scheme for the self-employed.
The fraud and error losses in the wage furlough scheme for staff that year was 3 per cent. HMRC told the Treasury committee that 4.6 per cent (£4.5 billion) of the cost of three pandemic support schemes it ran between 2020 and last year were claimed through fraud and error.
Jim Harra, HMRC chief executive, told Harriett Baldwin, chairwoman of the Treasury committee, in a letter that the furlough scheme accounted for £3.5 billion. A further £1 billion was stolen or wrongly claimed from the self-employment income support scheme.
Eat Out to Help Out, introduced by Rishi Sunak when he was chancellor to subsidises the hospitality industry, had about £71 million paid in fraud or error.
Harra said the employment schemes supported in total 14.6 million jobs and self-employed people.
“From the beginning we were clear that the schemes would be targets for fraud and also that customers operating at pace and under pressure would make mistakes: that’s why we designed the schemes in such a way as to minimise fraud and error while not unnecessarily delaying payments,” he wrote.
He said that a task force set up to recover funds expected to yield £1.1 billion by the time it was disbanded — a quarter of HMRC’s fraud and error estimate.
“The most complex cases will take longer and will conclude after transition from the [task force] is completed in September,” Harra said.
“In addition to our compliance activity on the schemes, claimants have also returned around £970 million in grants that they no longer required or where they had identified an error.”
Baldwin said: “While Covid funds were dispersed in a rush, we do expect the full force of the law to fall on fraudsters when they are found.”
TaxWatch, an investigative think tank and charity, has pointed to a lack of “serious consequences” for most people found to have abused the schemes, with civil and criminal penalties levied in few cases. TaxWatch said there was “very little deterrent”.
Why that’s even more than was siphoned off by Baroness Mone of Offshore.
‘The party of fiscal responsibility’. Err yeah right!
I know multiple people who worked for companies that got the employees onto furlough but had them working anyway, essentially carrying on business but having the taxpayer pay their wages instead. I don’t know any self-employed people that did that though, but I’m not surprised there were people abusing that system as well.
SE and I didn’t get a penny because I didn’t have a full years books (went SE sept 2019)
Angers me how so many fraudsters were able to pull money out the system and I was sat there struggling to pay rent
As usual they play the “look at the little crime” card. The tories are responsible for siphoning Billions to their cronies during that period. Why aren’t more questions being asked about that?