Covid-19 support worth £4.5bn lost to
error and fraud.
An
estimated £4.5bn in Covid-19 support has been lost to error and fraud since
2020, the tax authority has revealed.
The
funds were distributed through programs designed to aid businesses and
households in coping with the pandemic’s economic effects.
A
letter to a committee of MPs charged with monitoring government spending
provided specifics on the amount of money lost.
The
estimate of £4.5 billion, according to the letter, excluded money that HMRC,
the UK’s tax agency, had recovered.
The
government spent billions on a support package during the pandemic to keep the
economy going when lockdown restrictions were in place.
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The
Office for Budget Responsibility, the UK’s official economic forecaster,
predicted last year that the total cost of pandemic-related rescue measures
would be £310 billion.
Harriett
Baldwin, the chair of the Treasury Select Committee, demanded that the
government break down how much of that money was misappropriated or stolen.
Jim
Harra, the chief executive of HMRC, responded by stating that the amount was
expected to total £4.5 billion over the course of two fiscal years, 2020–21 and
2021–22.
The
Coronavirus Job Retention Scheme lost £3.5 billion, the Self Employed Income
Support Scheme lost $1 billion, and the Eat Out To Help Out program lost £71
million of this total.
Mr.
Harra stated in the letter that Covid support programs “aided millions of
people and businesses through the pandemic.”
He
claimed that HMRC was “clear that the schemes would be targets for fraud
and that customers operating at pace and under pressure would make mistakes”
from the start of the pandemic.
Mr.
Harra claimed that the schemes were created “so as to minimize fraud and
error while not unnecessarily delaying payments.”
While
acknowledging that Covid funds were distributed quickly, Ms. Baldwin told the
BBC that she expected fraudsters to face the full force of the law when they
were discovered.
HMRC
is currently making an effort to recoup Covid support that was lost due to
fraud and error.
According
to HMRC, through compliance activity, it had recovered more than £762 million
by the end of March 2022.
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In
his resignation letter from the Treasury last year, Lord Agnew criticized the
government’s handling of the fraudulent Covid business loans.
The
Liberal Democrats claim that due to the transfer of thousands of HMRC employees
to work on the Covid and Brexit schemes, billions of pounds in tax have gone
uncollected.
Treasury
minister Victoria Atkins stated in response to parliamentary inquiries that
approximately 1,250 HMRC employees were redeployed to work on Covid-19 schemes
in 2021–2022.
According
to her, HMRC’s revenue recovered through compliance activity decreased by £6
billion in 2021–22 when compared to the prior year.
Civil
servants are being shifted from one crisis to another in an ongoing game of
whack-a-mole, according to Sarah Olney, a spokeswoman for the Liberal Democrats
Treasury.
“Criminals
are being given a pass on evading millions of pounds in taxes while
hard-working families are seeing their taxes rise and public services are at
breaking point because of this.”
According
to HMRC, its compliance work “provides good value to the taxpayer”
and it moves resources “where and when they are most needed.”
