Recommendation 22

We asked HMRC why the number of prosecutions was so low and why it was not being tougher on those who had made fraudulent claims for employment support. HMRC told us that its approach was broadly the same as it applied to the tax system, where it used civil means to tackle fraud, including penalising people who have committed deliberate fraud and giving penalties for deliberate behaviour, and it reserved the right to conduct a criminal investigation and to prosecute people if it believed that this was the best way of tackling fraud. HMRC updated us on the number of criminal and civil investigations. Thirty-one criminal investigations were underway in November 2022, and HMRC had made 56 arrests.38 In comparison, it had opened 49,908 civil cases by October 2022, of which it had completed 34,860.39 Civil cases focus on opportunistic fraud. HMRC told us it that its criminal investigations were long, difficult, and very resource intensive because of the standard of evidence that it needed to reach to be able to demonstrate deliberate fraudulent behaviour. It said it reserved criminal investigation for cases that were “incredibly serious”, where its intent was to remove criminal operators as well recover money. It also said that when the schemes were open it publicised the arrests arising from its criminal investigations.40