Criminal gangs stole £350m from Covid support schemes
Fraudsters taking from Covid support schemes have cost the taxpayer almost £5bn, new analysis has revealed.
Organised crime gangs took £350m from schemes including the furlough Coronavirus Job Retention Scheme, the Self-Employment Income Support Scheme, and the subsidised meals initiative Eat Out to Help Out.
A remaining £4.6bn was taken opportunistic fraudsters, according to figures released by HMRC.
The government is likely to amp up its enforcement action over the next few months, according to law firm Pinsent Masons, who analysed HMRC’s data.
Wave of penalties
Tackling organised crime falls into the hands of the tax authority’s specialist fraud investigation service, who look at the most serious and complicated crimes.
Pinset Masons predicted a “wave of civil and criminal penalties,” including jail time for some.
“These schemes were absolutely vital to ensure the UK economy came out of the pandemic in the best possible shape. However, any handout of subsidies and aid of this size is going to attract fraudsters,” Steven Porter, partner at Pinsent Masons, said.
“The Treasury has already clawed back £98m from fraudulent or erroneous covid claims and a number of arrests have already been made.”
The furlough scheme lost the most to fraud, with the taxpayer defrauded of some £4.4bn, with £207m taken by organised criminals.
Just under half a million pounds was defrauded through the scheme to help self employed people, with £137m from criminal gangs.
The cost of fraudulent Eat Out to Help Out claims to the taxpayer was £58m. Of this figure, around £5m was taken by organised criminals.