Source · Select Committees · Public Accounts Committee
Recommendation 9
9
In its evidence to us, TaxWatch said the legacy of the employment support schemes risks...
Conclusion
In its evidence to us, TaxWatch said the legacy of the employment support schemes risks being damaged if more is not done to recover the billions of pounds stolen from them.20 The Association of Accounting Technicians submitted evidence to us in which it said HMRC’s current target for recoveries somewhat lacks ambition and HMRC needs do more to recover losses from errors and fraudulent payments.21 We asked HMRC how much extra money it would need to get the remaining £4 billion back. HMRC told us that it was not sure whether further spending on recovering employment support schemes payments would provide it with the greatest payback, although it recognised such action might be important for other reasons. We told HMRC that its answer reinforced the impression that it had written off chasing fraudulent payments and errors as too difficult and too resource intensive. It responded that it had made a realistic assessment of what it thought it could recover.22 Error and fraud on research and development tax reliefs
Government Response
Not Addressed
HM Government
Not Addressed
1.1 The government agrees with the Committee’s recommendation. Recommendation implemented 1.2 Since compliance work commenced on the COVID-19 support schemes, a great deal has been learnt about types and levels of error and fraud. HMRC’s pre-payment controls have been more effective than anticipated and the department has not seen the levels of organised crime and criminal attacks originally expected. HMRC has also not seen the level of overall fraud originally anticipated in estimates, and the majority of losses identified been a result of error. 1.3 HMRC has recovered and prevented losses of c.£840 million though all its compliance activity up to end March 2021. In April 2021 HMRC received £100 million to enable it to form the Taxpayer Protection Taskforce (TPT) with 1,265 staff, expected to recover between £800million-£1billion, up to the end of 2022-23. 1.4 Whilst no amount of error and fraud is acceptable, not all money lost to error and fraud is detectable and recoverable. HMRC will continue prioritising the most egregious cases of abuse but have said from the outset that they would not be actively searching for people who have made an honest mistake. If an error is identified in the course of enquiries then HMRC will, however, work with the claimant to put it right. 1.5. HMRC continues to adapt its approach to recover monies in the most cost-effective way and is undertaking a range of new and innovative activity to address risk.