Over £3.5 billion from the government furlough scheme may have been fraudulently claimed or paid in error, MPs have revealed. Almost 10 per cent of the £35.4 billion paid out by mid-August alone could have been affected, according to HM Revenue and Customs (HMRC) estimates cited by the Commons Public Accounts Committee, a team of MPs who scrutinise public spending. The committee said the Treasury had to ‘hastily’ draw up financial support schemes because of the ‘astonishing lack of economic planning for a pandemic’ in the . It said the scale of losses due to fraud and error were ‘very worrying’, and that the government should have done more to firewall the economy after years of warnings about the risk of a pandemic. The furlough scheme, due to finish at the end of October, was set up to pay 80 per cent of the wages of workers at firms seriously impacted by Covid-19. As of September 20, £39.3bn of furlough money had been dished out to 1.2 million companies. Sources close to the matter told Metro.co.uk treasury officials had to work round the clock to devise the scheme in a matter of weeks, and that many were resigned to it being vulnerable to fraud as a result of the rush. Committee chair Meg Hillier called for ministers to publish a list of the companies who benefitted from it. ‘Where taxpayers’ money is being used, transparency should be a given. HMRC must act now to minimise fraud and error and ensure that taxpayers do not pay time and time again in the years to come.’ ‘Our finding of the astonishing lack of economic planning for a pandemic shows how the unacceptable room for fraud against taxpayers was allowed into the Government’s hastily drawn up economic support schemes.’ The coronavirus outbreak also forced HMRC staff to switch from frontline tax collection to guiding taxpayers and businesses through the various Covid support schemes, the committee added. This lead to a 51 per cent drop in revenue collected through compliance work from April 6 to July 6 compared to the same period last year, according to the estimates – money which may never be recovered. The tax system has also started to be overhauled as it previously assumed the ‘vast majority’ of people can pay their taxes with just a ‘few exceptions’ needing to be chased up. HMRC has started issuing penalties for those who fail to send in tax returns amid a drop in the number being filed, the committee added. Sign Up for Not convinced? Find out more »
