Covid loan fraudsters should turn themselves in to avoid harsher penalties, lawyers say
Individuals who defrauded the government’s Covid support schemes should consider turning themselves in to avoid even harsher penalties, amid a far-reaching crackdown on those responsible for making fraudulent claims, lawyers have said.
The comments come after figures from the UK’s Insolvency Service showed the executive agency has struck off a total of 179 company directors, over claims they defrauded the UK government’s Covid financial support packages.
The figures from the UK’s Insolvency Service show the agency banned 140 execs from acting as company directors in the year running up to 31 March 2022, over claims they abused the £79.3bn given out by the government in Covid financial support.
A further 37 people were banned from acting as company directors in April and May alone, for various abuses of the government’s Covid support packages including falsely claiming furlough payments and defrauding the government’s Coronavirus Business Interruption Loan Scheme (CBILS).
Andrew Sackey, a partner at Pinsent Masons, said “Directors who abused Covid support schemes need to carefully consider their options. Often, self-reporting is the best way to mitigate the risk of custodial outcomes.”
The crackdown comes as HM Revenues and Customs (HMRC) has said fraudulent claims on the government’s Covid support schemes cost the taxpayer at least £5bn.
Sackey says: “Authorities like HMRC and the Insolvency Service are now hunting down those who made fraudulent claims. There will be a wave of civil and criminal penalties, including prison sentences.”
“The Treasury has already clawed back hundreds of millions from fraudulent or erroneous Covid claims and several arrests have been made, but this is just the beginning. The Government expects to recover billions in the next 12 months. It is taking action on multiple fronts to crack down on fraudsters and bring them to justice.”