Government to recoup 1bn of wrongly claimed Covid support

Covid Support

Experts have urged businesses to review Covid support claims as soon as possible and decide whether they need to be returned as the Government announces a new task force.

Wrongly Claimed Covid Support

The government has announced its intention to recoup around £1bn of Covid support that was wrongly claimed by businesses through the pandemic. The official statistics have estimated that around £5.8bn has been lost to fraud through the schemes the government implemented to support the business through the pandemic, schemes such as the Coronavirus Jobs Retention Scheme, Self-employment Income Support Scheme and Eat Out to Help Out.

The tax authority has stated that £500m in wrongly claimed support has already been recovered and another £350m has been returned by businesses without the need for intervention by HMRC. The tax authority also revealed that £650m in grants that were rightfully claimed have been returned due to those companies that claimed the grant, no longer needing the support.

Reclaiming Covid Support Lost to Fraud

To achieve the target of reclaiming between £800m and £1bn of Covid support money lost to fraud, HMRC has now announced a new specialist anti-fraud task force. The new Taxpayer Protection Taskforce consists of just under 1300 employees and has seen a £100m investment from the government.

Kate Shoesmith, deputy CEO of the Recruitment and Employment Confederation (REC), has stated that the majority of businesses tried hard to comply with both the spirit and intention of the furlough scheme, and suggested that employers that did so, need not worry about the government’s intention to reclaim the money.

Shoesmith continued on to warn that where fraud had taken place, the government was right to recoup money lost.

How can Firms Mitigate Risk?

Many experts are advising businesses to now reflect on the claims they may have made during the pandemic and whether they need to repay them.

Jemma Sherwood-Roberts, a partner at Constantine Law, said this would largely be a judgement call, If firms were confident their claims were legitimate, she advised: “Document that decision, noting how the claim was linked to the purpose of the scheme.” However, Sherwood-Roberts warned that where claims turned out to be incorrect it would be better to self-report and avoid the risk of “the new task force knocking on their door”.

Lee McIntyre-Hamilton, tax partner at Keystone Law, further warned employers, cautioning that assuming furlough claims were correct is a risky approach. McIntyre-Hamilton also advised businesses to revisit their claims, stating that also though the task may be an “unwelcome and perhaps painful exercise” doing so may help prevent unexpected issues in the future.

For businesses that join oneHR, our furlough tracker will allow you to keep an accurate record of which employees are away from the business on furlough and for how long, helping you review any potential support you and your business have received over the pandemic.

If you would like to learn more about how oneHR can help review any support claimed over the pandemic, contact our team and request a free demo of the software.


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