Source · Select Committees · Public Accounts Committee
Recommendation 12
12
HMRC’s initial planning assumptions suggested that the level of fraud and error would be 5%...
Conclusion
HMRC’s initial planning assumptions suggested that the level of fraud and error would be 5% to 10% within CJRS and 1% to 2% within SEISS. We asked whether it expected the level of fraud and error to change under the new scheme. HMRC told us that it had originally estimated that around half of the fraud and error in the CJRS (2.5% to 5%) would potentially be due to fraud committed by organised criminal gangs, but it had subsequently revised that down to 0.6% due to the controls it had put in place. There were fewer controls in place, however, to tackle the risk of furlough fraud where, for example, employers furloughed workers but then continued to get them to work, against the rules 22 Qq 58–59 23 Q 61, C&AG’s Report para 1.17 24 Qq 58–59 25 HMRC, HMRC coronavirus COVID-19 statistics, available at: www.gov.uk/government/collections/hmrc- coronavirus-covid-19-statistics 26 C&AG’s Report, figures 11, 12 and 13; HMRC, Coronavirus Job Retention Scheme statistics: October 2020, available at: www.gov.uk/government/publications/coronavirus-job-retention-scheme-statistics-october-2020/ coronavirus-job-retention-scheme-statistics-october-2020 27 Q 58, C&AG’s Report, para 2.20 28 Office for National Statistics, Unemployment rate (aged 16 and over, seasonally adjusted), released 10 November
Government Response
Not Addressed
HM Government
Not Addressed
5: PAC conclusion: The Departments will not know the actual levels of fraud and error within these schemes until 2021. 5a: PAC recommendation: HMRC should write to the Committee within three months outlining how it can utilise the information it already collects to better estimate the levels of fraud and error; and also outline what steps it intends to take to recover CJRS and SEISS grants made during the first phase of the scheme if recipients made substantial profits or were not adversely affected by the pandemic. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: March 2021 5.2 HMRC has already produced provisional assessments of Error and Fraud for CJRS and SEISS, using the best available evidence. The department will continue to improve and develop the evidence base for these assessments incorporating data from the schemes, operational compliance activities, and information from social research surveys. 5.3 The department will measure compliance levels using random enquiry programmes where appropriate. In the meantime, risk-based compliance activity to identify and recover incorrectly claimed grants continues to be a priority. 5.4 HMRC’s plans to recover funds from those who have deliberately abused CJRS and SEISS are set out in our post payment compliance approach – identifying cases via profiling, contacting many via one to many approaches and following up on those who do not respond, or whose responses need further investigation.