Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent estimate he has made of the funds paid out to dormant companies in relation to the coronavirus support schemes.

The COVID-19 support schemes have helped millions of people and businesses through the pandemic. These schemes are part of the collective national effort to protect jobs. HMRC administered the Coronavirus Job Retention Scheme (CJRS), Self Employed Income Support Scheme (SEISS) and the Eat Out to Help Out Scheme (EOHO)

SEISS was only payable to non-incorporated businesses. CJRS and EOHO was payable to both non-incorporated and incorporated businesses.

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. However, they could still be attractive to fraudsters.

To qualify for the Coronavirus Job Retention Scheme employers needed to have a Pay As You Earn (PAYE) scheme and submitted a Real Time Information (RTI) return with details of the employees’ wages. For instance, for claim periods between 1 November 2020 and 30 April 2021 employees included in furlough claims must have been employed on 30 October 2020 and HMRC must have received an RTI submission between 20 March 2020 and 30 October 2020 notifying a payment through PAYE in respect of that employee.

To qualify for the Eat Out to Help Out Scheme, claimants needed to register confirming they met the following criteria:

• Business sells food for immediate consumption on the premises
• Business provides its own dining area or shares a dining area with another establishment for eat-in meals
• Registered as a food business with the relevant local authority on or before 7 July 2020.

The company will have to have been actively trading to make a valid claim.

To ensure quick payment, HMRC undertook pre-payment risk assessments within 72 hours of receipt, blocking those indicating criminal activity.

As businesses were required to be active to make a valid claim, HMRC believes that the risk of funds being paid to dormant companies to be low.