HMRC accused of ‘ignorance and inaction’ over £6bn Covid fraud
HM Revenue & Customs has been accused by an influential group of MPs of “ignorance and inaction” on recouping £6bn of fraudulent Covid-19 support payments, drawing an angry backlash from the tax authority.
The public accounts committee (PAC), which monitors state spending, issued a litany of criticisms of HMRC, warning that money surrendered to fraudsters would ultimately add to the cost of living crisis engulfing Britain.
In a series of criticisms described as “damning” by shadow chancellor Rachel Reeves, the PAC said:
HMRC has effectively “written off” £4bn of Covid-related fraud.
Plans to recover fraudulent payments are “unambitious”.
This risks “rewarding the unscrupulous”.
Customer service at the tax authority has “collapsed”.
HMRC is not doing enough to crack down on tax avoidance.
PAC chair Dame Meg Hillier highlighted the volume of fraudulent claims made via three HMRC-administered Covid grant schemes, which include furlough, the Self-Employment Income Support Scheme and Rishi Sunak’s Eat Out To Help Out package for hospitality.
Citing HMRC’s estimate that it may recover £2bn of £6bn in fraudulent claims, she said: “The level of fraud and error in furlough that employers will get away with is a real concern.
“What signal does it send when HMRC rolls over on billions of pounds of fraud and error directly related to Covid support packages?”
HMRC said its estimate of what will be recovered did not mean that it has written off the remainder, which it intends to pursue.
But the report said HMRC was not doing enough to reclaim the money and was also failing in its wider duties, including ensuring tax compliance and preventing people being lured into avoidance schemes.
“With the current parlous state of the public finances we can
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