Taxman told to get tough on Covid fraudsters as only 25% of lost cash recovered
The taxman has been ordered to get tough on Covid fraudsters after it admitted it expects to recover only a quarter of lost money.
Dame Meg Hillier, who chairs the Commons public accounts committee, said schemes such as furlough had been “an open goal for fraudsters”.
His Majesty’s Revenue and Customs (HMRC) estimates around £4.5billion was lost in fraud and error as Covid support was dished out.
A temporary taskforce has been set up to claw back cash, but HMRC forecasts the team will retrieve just £1.1billion - leaving more than £3billion unaccounted for.
“The horse has bolted, but we believe there is a moral duty to pursue fraud,” Dame Meg said. “HMRC must ensure dishonesty is not seen to create advantage.”
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Public Accounts Committee chair Meg Hillier said the taxman has a "moral duty" to target Covid fraudsters (PA)HMRC has said its specialist team of 1,250 officials, who are working to get back taxpayer cash, will begin winding down in March. The unit will be closed down completely by September.
Billions of pounds that could be spent on public services also is being lost through unpaid tax, according to MPs.
The Commons Public Accounts Committee (PAC) found HMRC collected a record £731.1billion in taxes and duties in 2020-21, but this was £32billion lower than it should have been.
The amount owed to HMRC in tax debt has soared to £42billion.
Dame Meg said the “eye-watering” sums would have “filled a lot of this year’s infamous public spending black hole”.
An HMRC spokesman said: “Since 2005 we have cut the UK’s tax gap by more than 30%, and we continue to prioritise collecting unpaid taxes, which is why are adding a further 2,500 people to our compliance teams as well as rolling out our digital offer to ensure everyone pays what is due.
“We take a supportive approach to taxpayers in debt and balance that with recovering debt from those who can afford it. A blanket approach would put thousands of people and businesses to the wall.
“The Covid support schemes protected millions of jobs and businesses during the unprecedented pandemic, and whilst we ensured payments were not unnecessarily delayed we also minimised fraud through compliance checks.”
Labour’s Rachel Reeves said it was “a badge of shame” for Rishi Sunak that he “left the till open for fraudsters” during his time as chancellor.
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