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HMRC to recoup less than half £5.8bn lost in Covid fraud and errors


HMRC will struggle to recoup the estimated £5.8bn it paid out in error or due to fraud during the pandemic, its boss Jim Harra has admitted. HMRC paid out just over £81bn in total through the Coronavirus Job Retention Scheme, the Self-Employment Income Support Scheme and Eat Out to Help Out scheme during the pandemic. But Harra told the FT the dedicated taskforce set up by the tax authority to claw back the money expected to recoup just £2.3bn over the next 18 months. The news comes after the National Audit Office last week raised concerns about HMRC’s ability to recover approximately £42bn in tax debt built up during the pandemic, which more than doubled from pre-pandemic levels. Despite increased investment in debt collection, HMRC is currently understaffed and this, says Dawn Register, Head of Tax Dispute Resolution at BDO, could result in “more punitive action for non-compliance given that HMRC will be under pressure to resolve situations quickly.”

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