Almost 13,000 investigations of suspected fraud and other breaches in the use of coronavirus support schemes have been opened by HM Revenue & Customs.
The number of investigations launched by the tax authority was revealed after a freedom of information request by BLM, the law firm. HMRC reported formal compliance interventions related to the coronavirus job retention scheme, the self-employment income support scheme and Eat Out to Help Out. Compliance interventions are investigations expected to recover funds lost to the exchequer through fraud, tax avoidance, evasion and non-compliance.
There were 7,384 investigations related to the job retention scheme, 5,020 linked to the self-employment income support scheme and 424 related to Eat Out to Help Out. As of the end of March, five people had been arrested in connection with the job retention scheme and three in relation to Eat Out to HelpOut.
Details of BLM’s FOI request were first reported by the Financial Times.
This month HMRC said that £64 billion had been claimed under the job retention scheme and £24.5 billion under the self-employment scheme. Under Eat Out to Help Out, £849 million had been claimed across the 28 days the scheme was active. In total more than £89 billion has been paid out under the various schemes.
Iskander Fernandez, a partner and a specialist in white-collar crime at BLM, said: “As is the case with any scheme where fiscal support is provided, loopholes will emerge that can be fraudulently exploited. In hindsight, it is easy to say that more should have been done by way of due diligence on each applicant, but given the scale of the pandemic and all the uncertainty the nation was gripped with, it is hardly surprising that gaps emerged.”
A spokesman for HMRC said: “We are taking tough action to tackle fraudulent behaviour.”