Source · Select Committees · Public Accounts Committee
Recommendation 12
12
Acknowledged
We raised the point that there was a moral duty and fairness issue to pursue...
Conclusion
We raised the point that there was a moral duty and fairness issue to pursue fraud with, for example, some companies getting an unfair competitive advantage through their abuse of the schemes. HMRC said that it looks into every single allegation of fraud, drawing together other supporting data such as business performance. HMRC said that its controls had been effective at preventing organised crime from abusing the support schemes. It has found that a higher proportion of the losses than it first thought is due to error, rather than fraud, by a large number of fairly small concerns. HMRC said this affects the cost-effectiveness of recovering the losses, because it has to investigate a larger number of people. It said the rate of return it can expect from this activity is less than if it spent the same investment on tax compliance.16 VAT registration
Government Response Summary
HMRC will continue to address and recover overclaimed grants as part of its business-as-usual compliance activity, taking action against those who have abused the COVID-19 financial support schemes where it is cost effective to do so.
Government Response
Acknowledged
HM Government
Acknowledged
3.8 The government agrees with the Committee’s recommendation. Recommendation implemented 3.9 HMRC will continue to address and recover overclaimed grants as part of its business- as-usual compliance activity, taking action against those who have abused the COVID-19 financial support schemes where it is cost effective to do so. This approach will allow HMRC to deal holistically and efficiently with all aspects of a customer’s potential non-compliance, both in relation to potentially overclaimed COVID-19 scheme grants and other risks of non- compliance with taxation obligations. 3.10 To recover overpaid grants, HMRC’s post-payment compliance strategy has addressed risks differently depending on the claimant’s behaviour and the amounts and complexity involved. For low value, non-complex matters, claimants have been prompted to check their grant and return monies if they had overclaimed, with follow-up action by HMRC where necessary. More serious cases, where HMRC has suspected a fraudulent claim had been made, have been addressed by a one-to-one investigation. Any repayment of an