Taxman Expects to Recover Just a Quarter of Covid Fraud Cash

Nearly three years have passed since Rishi first opened the chequebook when Covid hit. Given taxes are now at a 70-year high and there’s another strike every ten minutes, it is worth remembering just how much cash has been lost to fraud and negligence – probably never to be found – since 2020. BEIS’ annual report showed that, of the three main loan schemes available to businesses during the pandemic, the level of “fraud and error” is estimated at 8.4% – or around £985 million. HMRC now say it’s £4.5 billion. The total liabilities for all Covid loan schemes, including for businesses which later went bust, is £15.8 billion

Now the Public Accounts Committee is once again fighting back. Committee Chair Meg Hillier has released an excoriating statement demanding the tax man gets tough, warning HRMC it has a “moral duty” to crack down on fraud and claw back more cash. According to the PAC, HMRC expects to recover just a quarter of Covid fraud losses…  

“…the public purse will continue missing out on billions of desperately needed revenues as HMRC will only employ more staff to tackle compliance over the next few years – not fast enough to dent the tax gap at a time of huge public sector spending pressures. Meanwhile taxpayers battle customer services that need improvement. The PAC has reported on the many problems in the Covid support schemes that made an open goal for fraudsters, but HMRC is settling for trying to recover less than a quarter of estimated losses in schemes such as furlough…”

During the leadership campaign, Rishi’s team claimed the fraud figure was around £7.5 billion, and that the Public Sector Fraud Authority were working around the clock. Given the figure seems to change every five minutes, and their initial target was to recoup a pathetic £180 million in its first year, Guido has serious doubts they’re up to much either. Rishi has been evasive on this issue, making excuses that he had to move at pace. Rishi was warned at the time that better checks needed to be made and the Treasury under him dismissed the warnings…

This hasn’t been made any easier by a tribunal decision last week to keep Covid Bounce Back Loan recipients secret, even though a Times investigation had uncovered dozens of fraudsters using the eye-watering £50,000 grants to “fund gambling sprees, home improvements, cars and watches”. Judge Sophie Buckley claimed the public interest angle was apparently outweighed by the risk that those named in the scheme could themselves be the targets of fraud:

“…overall we take the view that the extremely high public interest in transparency and scrutiny of these schemes is substantially met by other measures which had either taken place or were to take place.”

Bear in mind, the anti-fraud Minister Lord Agnew resigned nearly a year ago over government’s “lamentable track record” over all this. He was never replaced…

mdi-timer 11 January 2023 @ 09:42 11 Jan 2023 @ 09:42 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
£11 Billion* Still Missing from Treasury Coffers from Covid Fraud

With all of Rishi’s recent talk about finding efficiencies in government to balance the books, Guido’s had a look at his Treasury track record during Covid to see how it stacks up. First, Business Bounce Back Loans: according to BEIS figures, as much as £4.9 billion lent to 1.5 million companies was lost to fraud and negligence over the last two years. There are countless reports of fraudsters running away with their £50,000 cheques and splashing out on flashy watches and new cars – and more keep coming. Including cash lost to businesses that ultimately failed, that £3.9 billion figure rises to a potential eye-watering £17 billion. The scale of the problem was so enormous, anti-fraud Minister Lord Agnew actually resigned in disgust at the despatch box earlier this year…

Not to mention the billions flushed away on furlough fraud. The latest government estimates put the total losses there between £3.2 billion to £6.4 billion, with the “most likely” figure sitting at £4.5 billion. Although as National Audit Office head Gareth Davies points out on HMRC’s latest accounts, there’s still “considerable uncertainty”; a previous estimate put the figure as high as a whopping £8 billion…

Guido is aware of a specialist software company that works for the finance industry offering their services to assess credit risk and spot fraud patterns being turned away and told by the Treasury their services were not required. A costly mis-judgement for the taxpayer.

Rishi claimed, as Chancellor, that he wasn’t “ignoring” fraud and he “definitely” wasn’t writing it off. He said as much during the leadership debates, even as Kemi Badenoch insisted he didn’t take it seriously. To prove it, he pointed to the the Public Sector Fraud Authority announced in March – with £25 million of even more new money. That authority only started its investigations this month, and its initial target is to recoup just £180 million in its first year. The amount of money lost to fraud would be equivalent to taking some 5 pence off income tax. Assuming the business loan fraud cost £4.9 billion, and the job retention scheme fraud cost £6.4 billion, at this rate it would take the fraud squad just over half a century to track down the £11.3 billion lost in total…

*UPDATE:  Team Rishi get in touch to make arguments that suggest the figure is at most £7.5 billion and probably much lower than £7.5 billion. That’s still equivalent to some £2,000 per taxpayer…

mdi-timer 19 August 2022 @ 16:57 19 Aug 2022 @ 16:57 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Margaret Ferrier Pleads Guilty to Breaching Covid Rules

Former SNP MP Margaret Ferrier has pled guilty to breaking Covid rules in 2020, after taking a train from London to Scotland despite showing Covid symptoms and being told to self-isolate. She’d already lost the whip and had been sitting as an independent. Another by-election on the cards…

mdi-timer 18 August 2022 @ 10:50 18 Aug 2022 @ 10:50 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Drakeford’s Big Self-Promotion

Mark Drakeford went a step further than even Nicola Sturgeon in pushing the limits of the Union on Friday by referring to himself as “the Prime Minister of Wales” during a Covid press briefing. Speaking to BBC reporter Mark Hutchings, who asked Drakeford whether he planned to set a firm date for the lifting of Wales’ Covid restrictions, the First Minister said:

“No I won’t because I’m the Prime Minister of Wales, not a horoscope writer for a daily newspaper. And it’s simply impossible for anybody to peer into the future of coronavirus with the sort of definiteness you were suggesting.”

Hutchings later gave Drakeford the benefit of the doubt by suggesting it was just a “slip“. Probably, although Drakeford also changed his Twitter handle to “@PrifWeinidog” back in October – a direct Welsh translation of Prime Minister…

mdi-timer 24 January 2022 @ 10:37 24 Jan 2022 @ 10:37 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
WATCH LIVE: Boris’s New Year Omicron Briefing
mdi-timer 4 January 2022 @ 16:49 4 Jan 2022 @ 16:49 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Sajid Javid Warns That Pandemic “Is Far From Over”

This morning Sajid Javid warned that the pandemic “is far from over” following the discovery of a new highly mutated variant spreading across South Africa. In a Commons statement this morning, Javid said:

“Early indications show that this variant may be more transmissible than the Delta variant […] We must continue to act with caution and do all we can to keep this virus at bay”. 

So far there are no detected cases of this new variant in the UK, though Javid warned that it’s of “huge international concern”. The government has already moved six African countries onto the red list, with Transport Secretary Grant Shapps claiming the move was about “buying time” ahead of the “inevitable” spread of the new variant. Hardly a promising start to Christmas… 

mdi-timer 26 November 2021 @ 11:52 26 Nov 2021 @ 11:52 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
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