HMRC attempts to recover money from Covid schemes

The extent of fraud and error within the government’s furlough scheme is far wider than expected, a report has revealed.

The Public Accounts Committee(PAC) has published a report which found that an estimated 8.7% of money distributed by the government’s furlough scheme – equivalent to £5.3bn – has been lost to fraud and error.

The overall loss from fraud or error across all Covid responses is not known, but the report projected that this was at least £15bn across measures implemented by HM Revenue and Customs (HMRC), the Department for Work and Pensions (DWP) and the Department for Business, Energy and Industrial Strategy (BEIS).

Last month, HMRC announced that an estimated £5.8bn had been lost to fraud across all of the schemes put in place to support businesses during the pandemic, including the Furlough scheme, the Self-Employment Income Support Scheme and Eat Out to Help Out.

Responding to the report, HMRC has confirmed that it is taking action on multiple fronts to recover overpayments. A taskforce will be set up, consisting of 1,265 HMRC employees aiming to recoup £1bn of furlough support wrongly claimed by businesses.