MPs have warned that efforts to recover £2.3 billion of taxpayers wrongly paid to employers who claimed Covid furlough support for staff who continued to work have been “woeful” and will prevent potential future offenders. will fail.
The government has had little success in recovering the cash, the Commons Public Accounts Committee (PAC) said, while it criticized the decision to shut down the Taxpayer Protection Task Force without recovering money, saying it put taxpayers’ cash at risk .
In its report on Covid employment support, the cross-party committee said HM Revenue and Customs (HMRC) was too slow to deal with problems in the design of support schemes launched at the peak of the pandemic, seeing some of them as genuine needs I went. missed, while others were able to claim fraud and misrepresentation.
Bad actors in British business are skimming around revenue
It said that while the schemes were urgently needed to provide much-needed support, HMRC’s performance in recovering wrongly claimed cash has been “dismal”.
The report concluded that the government does not have sufficient understanding – and lack of evidence – of the impact of the £97 billion of taxpayers’ money spent on furlough job support.
Dame Meg Hillier, chair of the committee, said: “Bad actors in British business are siphoning off revenue.
“Probably some of the same companies that were complaining about minimal levels of transparency over the billions and billions paid out to save jobs in this country, but are now lost forever to the public purse.
“Although the money that actually saved jobs and homes got out admirably quickly, the weak recovery effort will fail to deter potential future offenders. Many companies claimed they should not have done so and now they Will not return it.
The committee called on HMRC to “send a clear message on fraudulent recovery through its tax compliance activities and urgently increase the rate of repayment from over-claimers”.
It has been estimated that a total of £4.5 billion has been lost due to error and fraud in furloughs, while at least £5 billion was paid where income was not lost.
Employers who over-claimed furlough have little incentive to voluntarily repay the grant as they are unlikely to be penalized if identified by HMRC’s compliance teams.
According to the PAC, weaknesses in HMRC’s data contributed to the first three out of five self-employment grants giving £3.5 billion to people whose incomes increased during 2020-21.
It said almost £6.5 billion of furlough payments were also made to employers whose turnover remained the same or increased during the pandemic, with £1.5 billion of this going to employers who reported that they would not have made redundancies or without being permanently closed. Plan.
But it said HMRC had “done little to punish the perpetrators”.
The report shows that HMRC was conducting just 31 criminal investigations in November 2022, compared to around 50,000 civil cases by October 2022.
As of March last year, HMRC had issued penalties of just £1.1 million – just 0.5% of the value of overpayments it identified.
The report claimed, “As a result, employers who over-claimed furlough have little incentive to voluntarily repay the grant as they are unlikely to be penalized if identified by HMRC’s compliance teams. “
The PAC wants the government to publish its final evaluation of furlough and self-employment income support schemes by the end of the year, detail lessons learned and work with other countries to learn from the wider international experience of providing employment support during the pandemic Do it and see how they compare with the UK.
A government spokesman said: “Without furloughs, millions would have lost their jobs.
“We had to act quickly to stop the catastrophic rise in unemployment.
“These schemes limit fraud and error without delaying payments to those who are in dire need.
“Over £1 billion has already been protected or recovered and we continue to root out those abusing the system.”
Credit: www.standard.co.uk /