Billions of pounds won’t be recovered by the tax authority at a time when the government insists that it doesn’t have the money to give hard-pressed public sector workers pay rises.

HM Revenue & Customs’ (HMRC) plan to close its task force focused on recovering money lost to fraudulent claims made on the government’s flagship Covid-19 support schemes, risks £5.1bn of taxpayers’ money, MPs have warned.

That means billions of pounds won’t be recovered by the tax authority at a time when the government insists that it doesn’t have the money to give hard-pressed public sector workers pay rises.

The House of Commons public accounts committee said on Wednesday it was “concerned” by HM Revenue & Customs’ plan to close its taxpayer protection task force, the FT reports.

It is estimated by HMRC that between £2bn-£5.1bn of fraudulent and faulty claims were made on three Covid schemes administered by the agency — the furlough scheme for company workers, the support programme for the self-employed and the “Eat out to Help Out”.

It was reported in October last year that HMRC was “falling short” on its efforts to recover billions lost to fraud and error through the coronavirus support schemes. At the time, National Audit Office head Gareth Davies urged the government to “improve the way it estimates levels of fraud and error and allocate sufficient resources” to tackle the issue of billions going to waste.

Commenting on the latest report, Dame Meg Hillier, Labour chair of the committee, said “bad actors in British business are running rings around the Revenue . . . the weak recovery effort will fail to deter potential future criminals. Too many companies claimed that shouldn’t have and now won’t give it back”.

Basit Mahmood is editor of Left Foot Forward

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