Recommendation 4

HMRC’s decision to close the Taxpayer Protection Taskforce in 2023–24 puts at risk the recovery of taxpayers’ money paid out as a result of error and fraud. In April 2021, HMRC set up the Taxpayer Protection Taskforce as a dedicated team of over 1,000 staff to increase its recovery of overpayments on the COVID-19 employment support schemes and the Eat Out to Help Out scheme. HMRC received an additional £100 million of funding for the Taxpayer Protection Taskforce, and it currently expects the Taskforce to recover between £525 million and £625 million. Despite these returns, HMRC plans to close the Taxpayer Protection Taskforce in September 2023 and will instead address non-compliance on the employment support schemes as part of its wider tax compliance work. We are concerned this change could lead to HMRC giving too little attention to the large sums of money outstanding on the employment support schemes. HMRC estimates indicate that between £2.0 billion and £5.1 billion of error and fraud within the schemes is likely to remain unrecovered by 2023–24. It would be unacceptable for HMRC to write-off such a large amount of taxpayer’s money. It must continue to tackle non-compliance on the schemes while it evidently remains cost-effective to do so. Recommendation 4a: HMRC should continue compliance work on the COVID-19 employment support schemes while it remains cost-effective to do so. It should set out, in its Treasury Minute response, how it will assess the cost-effectiveness of continuing compliance work after September 2023, and how it would compare to addressing fraud on other government spending. COVID employment support schemes 7 Recommendation 4b: HMRC should report annually in its Report and Accounts the yield it obtains from COVID-19 employment support schemes and the levels of unrecovered error and fraud until it stops its COVID19 grants compliance activity all together.