HMRC Covid Fraud Taskforce

Given the levels of support provided to businesses by the Government, fraudulent claims were always likely. We’ve talked about it several times previously, here and here for starters. As part of last week’s Budget announcements, the Chancellor included £100million for HMRC to create a task force of 1,265 staff to uncover those fraudulent claims, estimated as up to £3.5 billion.

The task force will focus its attention on the Coronavirus Job Retention Scheme (Furlough Scheme) and the Self Employment Income Support Scheme. At the same time, the law will be strengthened around the Bounce Back Loan scheme.

It’s been reported this week that when HMRC was last able to recruit a team of 1,000 to look at tax fraud, it generated a five-fold increase in the rate of prosecutions.

The level of investment is a significant increase in strength from the ‘nudge’ letters that were previously sent to claimants. It’s also an indication that the Government wants to address the issues around checks and balances in the schemes that were perhaps overlooked in their haste to get these support systems set up at the beginning of the pandemic.

HMRC’s powers and technological options will be enhanced with a further £180 million of investment alongside the additional staffing levels.

It’s estimated that activities to reduce tax avoidance and evasion will raise £2.2billion between now and 2025/26.

As we’ve mentioned before, please make sure that you have clear records to support claims that you’ve made through any of the Coronavirus support options.

Also, if you receive any communications from HMRC, please refer them to us if you’re a client. Our Fee Protection scheme, onto which all clients are automatically subscribed as part of our standard package, covers the costs of our time in responding to them. Our early involvement can reduce both the stress of any enquiry and also limit its scope.