| answer text |
<p>The Government has provided around £400 billion of direct support for the economy
since the start of the pandemic, which has helped to safeguard jobs, businesses and
public services in every region and nation of the UK.</p><p>The Government takes the
issue of potential fraud relating to covid support schemes extremely seriously. Robust
measures were put in place to control error and fraud in the key covid support schemes
from their inception.</p><p> </p><p>In relation to the Coronavirus Job Retention Scheme
(CJRS) and Self-Employment Income Support Scheme (SEISS), HMRC prioritised getting
money to those who needed it with the schemes designed to minimise fraud while not
unnecessarily delaying payments. The schemes were designed to prevent fraud, both
in the eligibility criteria and the claim process itself.</p><p> </p><p>As recovering
funds lost to organised criminals is especially difficult, HMRC prioritised tackling
this risk before payments were made. Eligibility has been limited to employees and
the self-employed who already had a tax footprint, which gives HMRC greater confidence
these are not ‘bogus’ claims falsified to look like real businesses. HMRC also put
in place a series of checks on claims before they are paid so that HMRC were able
to block those that are highly indicative of criminal activity. In addition, HMRC
is able to investigate suspect payments that did not meet the threshold for pre-payment
blocks post-payment, using their full range of civil and criminal powers and tools.</p><p>
</p><p>In relation to the CJRS specifically, HMRC ensured that the claims service
captured all the data necessary to enable post payment compliance and only accepted
claims from employers known to and authenticated by HMRC. HMRC have actively prevented
non-eligible employers from applying. Claimants are required to provide details of
who has been furloughed and for how long, providing HMRC with clear data against which
to make checks.</p><p> </p><p>Regarding the SEISS, claimants had to have made a 2018/19
self-assessment tax return in order to claim grants 1 to 3 and a 2019/20 tax return
to claim grants 4 and 5. The amount they claim is based on tax returns previously
submitted to HMRC. In addition, compliance activity is underway in respect of those
claimants who have indicated on their tax returns that their self-employment has ceased
but claimed a SEISS grant. If HMRC identify grants have been claimed when the person
is not eligible, then recovery of the overpaid amounts is undertaken, with appropriate
penalties being issued to those most egregious of cases. HMRC have also implemented
pre-claim verification checks on those customers who have submitted 2019/20 returns
as newly self-employed. The purpose of these checks is to establish that the return
is from a genuine person, and they are undertaking self-employed activity.</p><p>
</p><p>Eat Out to Help Out scheme ran for one month in August 2020. HMRC’s risk analysis
identified customers whose claims indicated significantly supressed turnover and/or
an inflated claim. HMRC launched a campaign aimed at encouraging these customers to
repay excess claims (although where HMRC believe something is clearly egregious, they
moved straight to direct intervention). Customers who presented a risk following this
campaign were triaged for further activity. HMRC also directly investigated around
800 of the highest risk cases.</p><p> </p><p>Regarding Bounce Back Loans (BBLS), lenders
were required to make and maintain appropriate anti-fraud, anti-money laundering and
Know Your Customer checks. Specifically, lenders must use a reputable fraud bureau
(such as The UK’s Fraud Prevention Community CIFAS’s fraud prevention and detection
solution SIRA) to screen against potential or known fraudsters. If an application
fails the lender’s fraud checks, the lender must not offer a loan.</p><p> </p><p>In
addition to these lender checks, further checks include the duplicate loan check,
incorporation date check and the change in director check that were introduced in
June 2020. These minimum standards were agreed following consultation with PWC and
lenders on what would have the biggest impact on preventing fraud while still meeting
the policy objectives.</p><p> </p><p>Under the Coronavirus Business Interruption Loan
Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS),
lenders were able to conduct full credit checks on borrowers in line with business
as usual processes and thus verify the financial information provided by borrowers,
with less reliance on information self-certified by the borrower (as is the case under
BBLS). This reduces fraud risk by allowing lenders to assure themselves that borrowers
are not providing false information in order to obtain funds.</p>
|
|
