HM Revenue & Customs opens 13,000 inquiries into potential Covid fraud
Tax investigators have opened nearly 13,000 probes into suspected fraud and other related breaches of the coronavirus support schemes.
HM Revenue & Customs (HMRC) also revealed that it has begun a handful of criminal investigations.
The number of investigations launched by HMRC was revealed following a freedom of information request by law firm BLM.
HMRC reported the number of formal compliance interventions related to the Coronavirus Job Retention Scheme (CJRS) or furlough, the Self-Employment Income Support Scheme (SEISS) and the Eat Out to Help Out scheme. Compliance interventions are investigations expected to recover funds lost to the UK through fraud, tax avoidance, evasion and non-compliance.
BLM found that HMRC opened 12,828 investigations up to the end of March, with the largest proportion (7,384) relating to the use of the furlough scheme.
The tax body had also launched 5,020 investigations into the self-employed income support scheme and 424 into the Eat Out to Help Out scheme, as of the end of March 2021.
HMRC has opened the inquiries in order to protect or recover funds that were lost to fraud, tax avoidance and evasion and other breaches of the rules.
A spokesperson for HMRC said: “It is vital we support businesses to recover by ensuring a level playing field, so the majority are not undercut by the few who tried to cheat the system.
“We are taking tough action to tackle fraudulent behaviour. We have now opened more than 12,000 inquiries into claimants we suspect may have kept more than they were entitled to. We have also begun a handful of criminal investigations.”
It comes after Chancellor Rishi Sunak announced the Treasury would invest £100m into a specialist taskforce to tackle fraud across all Covid-19 support packages in the March Budget.
As part of the freedom of information request, the tax authority revealed that so far five individuals have been arrested in relation to the CJRS and three in relation to Eat Out to Help Out. HMRC was unable to confirm the current number of prosecutions relating to the schemes.
Separately, the National Crime Agency (NCA) arrested three city workers in January as part of an investigation into fraudulent coronavirus bounce-back loans totalling £6m.
More than one million UK businesses have used the furlough scheme during the pandemic, and a cumulative total of 11.5m jobs have been supported by the CJRS, according to the latest Government estimates.