The total value of fraud in three coronavirus (COVID-19) schemes totaled £4.5 billion, with the tax authority only expecting to recover £1.1 billion, Jim Harra, HMRC’s Chief Executive, has told MPs.
Speaking at the Treasury Committee, Mr Harra said £4.5 billion was lost to fraud in the furlough, self-employed support and Eat Out to Help Out COVID-19 schemes.
Eat Out to Help Out, which ran for just a month in July 2020 after it was introduced by then-Chancellor Rishi Sunak, had a particularly high level of fraud of around 9%. This figure is higher than any other scheme and ‘much higher’ than would normally be expected in the tax regime generally, according to Mr Harra.
The scheme operated on a self-assessment basis which relied on cafes and restaurants declaring correct amounts to HMRC.
Mr Harra told MPs that there had been arrests, which in turn resulted in some voluntary disclosures from restaurants who admitted mistakes in their claims and repaid.
He said: ‘I’m aware of one case where a restaurant claimed to have a record month in sales during Eat Out to Help Out at the same time as they were claiming to have furloughed all of their staff. You’d be surprised at what people think we won’t join up.’