Recommendation 15

As part of our initial inquiry into fraud and error across COVID-19 support schemes in June 2021, we concluded that departments did not make enough use of counter fraud expertise when designing new initiatives to ensure they minimise losses to the taxpayers, and that gaps in information sharing was hindering efforts to prevent, detect and correct fraud and error.23 We therefore asked HMRC whether it was working with the Cabinet Office counter-fraud service to improve data sharing to tackle fraud. HMRC told us it had shared data to help the Department for Business, Energy & Industrial Strategy to manage fraud risks on bounce back loans. It also said that commercial databases—rather than other public bodies’ data—were most helpful for risk assessing cases and intervening where necessary.24 We received written evidence from CIFAS—which represents the UK’s fraud prevention community—that HMRC had not applied industry standard fraud checks when administering the schemes. It told us that HMRC did not have visibility of the largest UK database relating to first and third party fraud risk, and therefore had an incomplete picture of the fraud risk profile around each transaction. It recommended that HMRC should now introduce industry standard fraud checks.25