HMRC has been hit with a committee report which shows the impacts of the furlough scheme as it failed to recover billions in fraudulent claims.
MPs sitting on the Public Accounts Committee found that between £2 billion and £5.1bn from the schemes will not be recovered by 2023-24 by HMRC.
The committee described this as “unacceptable” and also called HMRC’s efforts to claim back £2.3bn of furlough paid to employers despite their employees still working as “woeful”.
The SNP also hit out at HMRC, saying that an “urgent review” was needed to figure out how this situation came to be.
The party’s economy spokesperson Stewart Hosie said: “It is scandalous that HMRC has failed to track down billions of pounds of fraud from the furlough scheme.
“Billions of pounds of waste has piled up under their Tory UK Government in the midst of a cost of living crisis of their making.”
HMRC was also criticised for failing to track down culprits of fraud and is unable to tell how many people were overpaid for furlough or those who ended up with no support because they were ineligible.
“This could open up the floodgates for bad actors in future who will be able to claim falsely from the UK Government and be safe in the knowledge that there will be no repercussions from their actions”, Hosie added.
“I would urge the Chancellor to review how HMRC recovers false claims and ensure that even more taxpayers’ money is not lost to fraudsters.”
The report explained: “The extent of error and fraud and unnecessary support was made more disappointing because several million people whose incomes were affected by the Covid-19 pandemic were not eligible under the schemes’ rules.”
It added that the UK needs to “learn lessons” from schemes such as this to better learn “how to target support more effectively and protect the public purse in future crisis interventions”.
“In the meantime, HMRC must quickly address known gaps in its data without imposing excessive administrative burdens on taxpayers, so that government can better target support in future large-scale financial interventions and ensure all those in need get assistance.”
A UK government spokesperson said: “Without furlough, millions of people would have lost their jobs. We had to act quickly to prevent catastrophic increases in unemployment.
“These schemes limited fraud and error, without delaying payments for those in desperate need of them. Over £1 billion has already been protected or recouped and we continue to root out those who abused the system.”
