In today’s budget, UK Chancellor Rishi Sunak announced a £100 million taskforce to scrutinise claims made under business support schemes designed to help companies and workers navigate their way through the economic impact of the COVID-19 pandemic. The Taxpayer Protection Taskforce will be examining claims made honestly but in error as well as those made fraudulently.

The UK Government’s package of COVID-19 support schemes are credited with saving millions of jobs and keeping many businesses viable. However, auditors and Members of Parliament have been quick to point out that weak safeguards left the schemes vulnerable to exploitation.

Schemes to be scrutinized by the Taskforce include:

  1. Coronavirus Job Retention Scheme (furlough scheme), now in place to September 2021;
  2. Coronavirus Bounce Back Loans;
  3. Coronavirus Business Interruption Loan Scheme;
  4. Coronavirus Large Business Interruption Loan Scheme;
  5. Self-Employment Income Support Scheme;
  6. Closed Businesses Lockdown Payments (CBLP); and
  7. Lockdown Restrictions Support Grants (LRSG).

The Taskforce is the latest in a series of measures put in place to uncover misuse of the UK Government’s financial rescue plans. Under the Finance Act 2020 details of claims made by employers under the furlough scheme for periods starting on or after 1st December 2020 are now published online. Her Majesty’s Revenue and Customs (HMRC) hope by making this information accessible there will be increased transparency, deterring fraudsters.

Common abuses of the financial schemes include misrepresenting the working hours of employees, payments not being passed to employees, employees being asked to work or ‘volunteer’ whilst on furlough, and employers claiming for employees that have been working or were dismissed before the scheme start date. In relation to loans, it is expected many have been obtained by companies that were dormant, or businesses that were already insolvent.

HMRC is aware that some organisations have acted in good faith when making claims for much needed support, but due to a change in circumstances, or a mistake, have received funds to which they were not properly entitled.

The Taxpayer Protection Taskforce will be under the remit of HMRC. HMRC have already opened approximately ten thousand enquiries into suspected fraudulent activity, some of which are criminal investigations.

Any business which has made claims for economic support due to the pandemic should now be proactive in checking the veracity of its representations and seeking legal advice in relation to any areas of concern.