Investigations into COVID-19 support schemes: 12k and counting

HMRC have undertaken over 12,000 interventions relating to claims made under the government's package of Coronavirus business support schemes.

Under a Freedom of Information Act request by law company BLM, HMRC revealed that by the end of Q1 2021 they had carried out over 12,000 interventions into abuse of the:

• Coronavirus Job Retention Scheme (CJRS); 7,384 interventions.
• The Self-Employment Income Support Scheme (SEISS); 5,020 interventions.
• Eat Out to Help Out Scheme (EOHO); 424 interventions.

Compliance interventions are an investigation carried out by the HMRC, with an interest to protect or recover funds lost to the UK through Fraud, tax avoidance, evasion and non-compliance.

Up to June 2021, HMRC reported that:

• Almost £18 billion has so far been paid out under CJRS.
• £24.5 billion has been paid out under SEISS.
• £849 million was claimed to cover 160 million meals across the 28 days EOHO was active 

Speaking of the findings, Iskander Fernandez, partner and specialist in white-collar crime and investigations lawyer at BLM said, "When taking the various other recovery schemes aimed at businesses into account, such as the Bounce Back Loans (BBL) and Coronavirus Business Interruption Loan Scheme (CBILS), it is not unreasonable to suggest that we are talking about losses in the billions through fraudulent activity. As it takes time for HMRC to build a case, it’s unlikely that we’ll see an immediate wave of arrests and prosecutions." 

Up until the end of March HMRC reported only five arrests for CJRS offences and three for EOHO.

Additional data reported by the Financial Times showed that HMRC had received 28,444 reports of potential furlough fraud by the start of this month.

Useful guides on this topic

Appeals: Grounds for Appeal Toolkit
What grounds are there to appeal a tax penalty? How can you word a tax appeal? Can you appeal HMRC errors? What is a reasonable excuse?

Client Briefing: How to avoid penalties for carelessness
Client briefing: how do you avoid penalties for carelessness when preparing your tax return?

Discovery Assessments: At a glance
What is a Discovery Assessment? When can HMRC make a Discovery? What are the time limits for Discovery Assessment? 

Corporate Criminal Offence: failure to prevent tax evasion toolkit
This is an interactive tool to determine 'At a glance' whether there has been an offence committed under the Criminal Finances Act (2017) in respect of a corporate failure to prevent the criminal facilitation of tax evasion.

COVID-19: Coronavirus Job Retention Scheme (CJRS) from 1 November 2020
What is CJRS?  When does the CJRS apply? How to claim CJRS. How to calculate CJRS claim amounts.

COVID-19: Self-Employment Income Support Scheme (SEISS)
Support for the self-employed during the Coronavirus crisis. 

External links

BLM release: HMRC leading over 12,000 interventions into use of Coronavirus support schemes