The Treasury expects to recover only £1 of every £4 in Covid support payments that were claimed by those who were not entitled to them, including furlough grants, it has emerged.
An estimated £5.8bn in support grants were paid out to fraudsters via schemes including the Coronavirus Job Support Scheme (CJRS) and the self-employed income support scheme in 2020 and 2021.
Some £4.3bn in fraudulent claims has been written off by the Treasury, meaning that a maximum of only 26% of the money claimed unlawfully will return to the public purse.
The government has formed a 1,200-strong anti-fraud taskforce to help reclaim some of the money that was paid out following erroroneous or fradulent claims at the height of the pandemic.
In November HM Revenue & Customs said the taskforce was expected to recover £1bn in fraudulent or incorrect claims over the next two years. At that point it had 23,000 investigations open.
The CJRS, which operated from March 2020 to September 2021, allowed employers to claim some of the wages owed to employees who were unable to work their full contracted hours due to pandemic restrictions. It supported more than 11.7 million jobs, with around 1.14 million employees still being supported under the scheme when it closed on 30 September 2021.
Furlough
Number of employees on payrolls grew after furlough ended
Furlough fraud totalled £5.2bn last year
Quarter of workers have been on furlough at some point during pandemic
Tim Stovold, a partner at the accountancy firm Moore Kingston Smith, told The Times that it would now be very difficult for the Treasury to recover money from firms who had claimed funds they were not entitled to.
“HMRC could have either put in place a robust checking process that would have slowed the payment of these support payments to a trickle or allow a straightforward claim process and accept that fraudulent and incorrect claims would run into billions,” he said.
An HM Revenue & Customs spokesperson said: “Throughout this crisis, the government’s number one priority has been to protect jobs and livelihoods while also supporting businesses and public services across the UK.
“Robust measures were put in place to control error and fraud in the key Covid support schemes. The controls put in place delivered results. It was right to put the schemes in place despite knowing there would be some error and fraud.
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“The government has invested over £100m in a Taxpayer Protection Taskforce of 1,265 HMRC staff to combat fraud on the HMRC Covid-19 schemes, one of the largest and quickest responses to a fraud risk by HMRC.”
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