Digital processes helped tax agency block fraudulent attempts, according to minister
Automated digital tools allowed HM Revenue and Customs to stop more than 100,000 fraudulent or otherwise ineligible claims made to the government’s coronavirus support schemes, a minister has claimed.
From March 2020 to September 2021, the tax agency was in charge of managing the Self-Employment Income Support Scheme (SEISS) and the Coronavirus Job Retention Scheme – commonly known as the furlough programme. It also ran the Eat Out to Help Out (EOHO) subsidy programme which, during August 2020, offered citizens half-price meals at eateries around the country.
To help ensure claims made to the three programmes were legitimate, HMRC deployed automation technologies to detect those made by false or disqualified claimants, according to financial secretary to the Treasury Lucy Frazer. The department supplemented these digital tools with other targeted checks, based on risk assessments, she added.
“By building automated controls into the digital claim process, HMRC prevented more than 100,000 ineligible or mistaken claims within the Covid-19 schemes,” Frazer said. “By carrying out pre-payment checks based on risk and intelligence profiles, HMRC also blocked more than 29,000 claims and registrations in 2020-21.”
A total of 1.3 million employers used the furlough scheme to claim support for 11.7 million jobs, while 2.9 million self-employed people claimed a cumulative tally of 10.4 million grant payments. Diners at 78,116 restaurants took advantage of 160 million cut-price meals under the terms of the EOHO scheme.
The government spent about £99bn across the three schemes, including £70bn in furlough payments, £28.1bn in support for the self-employed, and £849m on the Eat Out to Help Out programme.
HMRC has faced criticism for the level of fraud perpetrated under the Covid support schemes, as well as for the agency’s efforts to recoup related losses: of the £5.8bn cost of fraud and error across the three programmmes, the department expects to recover no more than £1.5bn by this time next year.
Frazer, who was responding to a written parliamentary question from fellow Conservative MP Mike Penning, said that the furlough and self-employment support programmes were “designed to prevent as much fraud as possible before any payments were made, while still quickly supporting those who needed it”.
“The government remains committed to cracking down on fraud wherever it arises, which is why the government has invested over £100m in a Taxpayer Protection Taskforce of 1,265 HMRC staff to combat fraud on the HMRC-administered Covid-19 schemes,” she added. “This is one of the largest and quickest responses to a fraud risk by HMRC. The task force is expected to recover £800m to £1bn from fraudulent or incorrect payments over the next two years. This builds on the work already done, which saw HMRC recover £536m in 2020/21.”