MPs said the tax authorities’ failure to put in place pandemic support programs has resulted in billions of pounds of taxpayer money being lost to fraud and error.
The shortcomings and slowness of HM Revenue and Customs (HMRC) in resolving problems in urgent systems meant that some of those who needed help went missing, while others received money where they were not needed.
Their findings would embarrass Prime Minister Rishi Sunak, who was chancellor when the plans were made and vowed to prosecute those “who abused the plan.” When the extent of the dismissal scam became apparent, he denied that he was “ignoring” the issue, saying, “I’m definitely not going to write it off,” he said.
Despite his promise, MPs in the Parliamentary Public Accounts Committee (PAC) said the government was unable to return the money.
They found that while the Treasury and HMRC were quick to roll out programs that provide “essential” support to businesses and individuals, they were too slow to better target support to those who really need it and catch errors and fraud. .
MPs said the programs — the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS) — were quickly established in March 2020 and extended several times before completion in September 2021.
They called the £96.9bn programs “costly” and said they estimated £4.5bn was due to “mistakes and fraud” and that at least £5bn was spent in the first year of the programmes. sterling. Employees and employers whose incomes have increased. not lowered.
The GAC said the level of errors, fraud and unnecessary assistance is disappointing as more than a million people whose incomes have been affected by the pandemic are not eligible for assistance.
It said the number of uncorrected errors and fraud was “too high” and HMRC investigators were “not successful” in recovering the £2.3bn erroneously paid to employers who frequently take vacations applied for by continuing employees. They said they have closed 254 cases so far and have returned £640,000.
HMRC did little to punish the perpetrators, PAC complained, having conducted just 31 criminal investigations in November 2022 compared to nearly 50,000 civil investigations that were launched in October 2022.
According to HMRC, civil lawsuits focus on opportunistic fraud. Investigators can penalize employers if they prove they were intentionally exaggerating, but they acknowledged that suspicious cases would not be treated as outright fraud unless intentional behavior could be proven.
As of March 2022, only CJRS have been fined by HMRC for a total of £1.1 million, representing 0.5 per cent of the overpayments found. “Consequently, there is little incentive for employers who have requested too much leave to voluntarily repay grants as they are unlikely to be penalized if found by HMRC compliance teams,” the report says.
The IRS is also discontinuing the Taxpayer Protection Task Force, a dedicated team of more than 1,000 dedicated employees set up to recover mispaid and Eat Out to Help Out amounts.
The Task Force has received £100m in additional funding and is expected to refund between £525m and £625m before closing in September.
The work of the task force will continue as part of its broader tax compliance work, she said.
“We fear this could lead HMRC to pay too little attention to large sums of money.
great. HMRC estimates that bugs and fraud in systems could cost between £2bn and £5.1bn.
remain unremovable until 2023-2024. It would be unacceptable for HMRC to write off such a large amount of taxpayer money,” the report warns.
“HMRC must now send a clear signal that it is committed to correcting the fraud associated with these schemes,” MEPs said.
Dame Meg Hillier, chairman of the committee, said: “The bad guys in the UK economy are running around the tax authorities.
“Perhaps some of those companies that lamented even minimal transparency about the billions and billions spent to save jobs in this country are now simply lost to the treasury, perhaps forever.
“While the money that did save jobs and homes was released surprisingly quickly, the flimsy recovery efforts won’t stop would-be criminals. Too many companies have said it shouldn’t have happened, and now they don’t confirm it.”
The PAC concluded that the government did not sufficiently understand and prove the impact of the £97bn of taxpayer money spent on holiday support.
The government defended its track record of firing rules. “Without vacations, millions of people would lose their jobs. We had to act quickly to avoid a catastrophic rise in unemployment. These precautions minimized fraud and errors without delaying payments to those who were in dire need of them. Over £1 billion has already been secured or recovered and we continue to eliminate those who have abused the system.
Officials said the vast majority of employers who didn’t experience a drop in sales due to COVID continued to report being fired or closed without a layoff scheme. Similarly, exchanges may have helped the self-employed stay afloat, even if their income increased later.
The total amount of funds blocked for withdrawal or returned since the launch of the programs is more than £1.2bn, they said, with work continuing to ensure compliance. “We are absolutely committed to fighting bugs and fraud in the Covid support programs. We are not writing anything off and will continue to prioritize the most serious cases of abuse after the end of 2022/23.”
Source: I News
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