Asked by: Charlotte Nichols (Labour - Warrington North)
Question to the Home Office:
To ask the Secretary of State for the Home Department, what steps she is taking to tackle fraudsters who send fake messages that urge people to purchase covid-19 testing kits; and if she will make a statement.
Answered by Damian Hinds - Minister of State (Education)
The Government is aware that fraudsters continue to exploit the pandemic to commit opportunistic crimes such as fraud. We are working closely with local enforcement teams and urging the public to beware of fake text messages instructing people to purchase covid-19 testing kits. That is why published guidance to assist the public in purchasing covid-19 testing kits. This advice can be accessed at: https://www.gov.uk/government/publications/list-of-private-providers-of-coronavirus-testing/list-of-private-providers-of-coronavirus-testing.
The Government takes the issue of disinformation very seriously. That’s why we stood up the Counter Disinformation Unit in March 2020 which brings together monitoring and analysis capabilities across Government and is working at pace to develop a comprehensive picture of the extent, scope and the reach of disinformation and misinformation on COVID-19, and to work with partners to tackle it.
We continue to encourage anybody who suspects an email, text or other form of communication to be suspicious to report it to report@phishing.gov.uk or forward a text to 7726, free of charge. This information is being used by law enforcement partners, alongside crime reports to identify, disrupt and stop fraudsters.
Asked by: Mike Penning (Conservative - Hemel Hempstead)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many claims were excluded or rejected from the (a) Self Employment Income Support Scheme and (b) Coronavirus Job Retention Scheme.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Self-Employment Income Support Scheme (SEISS) and the Coronavirus Job Retention Scheme (CJRS) were designed to prevent as much fraud as possible before any payments were made, while still quickly supporting those who needed it.
By building automated controls into the digital claim process, HMRC prevented more than 100,000 ineligible or mistaken claims within the Covid-19 schemes, namely CJRS, SEISS, and Eat Out to Help Out. By carrying out pre-payment checks based on risk and intelligence profiles, HMRC also blocked more than 29,000 claims and registrations in 2020-21.
The Government remains committed to cracking down on fraud wherever it arises, which is why the Government has invested over £100 million in a Taxpayer Protection Taskforce of 1,265 HMRC staff to combat fraud on the HMRC-administered Covid-19 schemes. This is one of the largest and quickest responses to a fraud risk by HMRC.
The Taskforce is expected to recover £800 million to £1 billion from fraudulent or incorrect payments over the next two years. This builds on the work already done, which saw HMRC recover £536 million in 2020-21.
Asked by: Kirsten Oswald (Scottish National Party - East Renfrewshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the answer of 21 February to Question 120805, on Coronavirus Job Retention Scheme, what unique identifiers, other than National Insurance numbers, were used by HMRC to ensure payments made under the Scheme were claimed against identifiable employees.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
As set out in the answer given to PQ UIN 120805, to qualify for the Coronavirus Job Retention Scheme (CJRS) employers needed a Pay As You Earn scheme and to submit a Real Time Information (RTI) return. Additionally, for claims with 100 employees or more, employers were required to provide details of the individual employees’ wages.
It is not mandatory to have a National Insurance (NI) number to be employed, therefore not all employees on furlough would have a NI number attached to a claim made by their employer for CJRS.
Undertaking further in-depth analysis using RTI would take significant time to execute, and undertaking the analysis requested could only be done at disproportionate cost. As a result, the Government is unable to say what proportion of payments under CJRS were in relation to employees without a NI number.
HMRC designed the schemes to prevent fraud before any payments were made, through the eligibility criteria set and in the design of the claim process itself. Data and risking experts blocked suspicious claims that showed signs of criminal activity and built upfront controls into the claims process to reduce the risks of fraud and error and to ensure that employers provided the data needed to do later checks if necessary.
HMRC limited the eligibility of grants to employees who already had a tax footprint. They also put in place a series of checks on claims before they were paid so that those that were highly indicative of criminal activity were blocked.
Asked by: Kirsten Oswald (Scottish National Party - East Renfrewshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the answer of 21 February 2022 to Question 120805, on Coronavirus Job Retention Scheme, for each phase of the Scheme, how many and what proportion of payments made by HMRC were made against claims for employees for whom no National Insurance number had been recorded on HMRC's Real Time Information system.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
As set out in the answer given to PQ UIN 120805, to qualify for the Coronavirus Job Retention Scheme (CJRS) employers needed a Pay As You Earn scheme and to submit a Real Time Information (RTI) return. Additionally, for claims with 100 employees or more, employers were required to provide details of the individual employees’ wages.
It is not mandatory to have a National Insurance (NI) number to be employed, therefore not all employees on furlough would have a NI number attached to a claim made by their employer for CJRS.
Undertaking further in-depth analysis using RTI would take significant time to execute, and undertaking the analysis requested could only be done at disproportionate cost. As a result, the Government is unable to say what proportion of payments under CJRS were in relation to employees without a NI number.
HMRC designed the schemes to prevent fraud before any payments were made, through the eligibility criteria set and in the design of the claim process itself. Data and risking experts blocked suspicious claims that showed signs of criminal activity and built upfront controls into the claims process to reduce the risks of fraud and error and to ensure that employers provided the data needed to do later checks if necessary.
HMRC limited the eligibility of grants to employees who already had a tax footprint. They also put in place a series of checks on claims before they were paid so that those that were highly indicative of criminal activity were blocked.
Asked by: Justin Madders (Labour - Ellesmere Port and Neston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what meetings Ministers and officials in his Department held with stakeholders on the £4.3 million lost to fraudulent covid-19 claims; and who was in attendance at those meetings.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The £4.3 billion figure that has been widely reported is not a figure produced or recognised by HMRC or HMT. HM Treasury works closely with HMRC to ensure a robust approach to error and fraud within the Coronavirus Job Retention Scheme, the Self-Employment Income Support Scheme, and Eat Out to Help Out, and the Government remains committed to cracking down on fraud wherever it arises.
Within the unprecedented £400 billion package of support, the Government put robust measures in place to control error and fraud in the key pandemic support schemes. By building automated controls into the digital claim process, HMRC prevented more than 100,000 ineligible or mistaken claims in these schemes. At the March 2021 Budget, the Government invested over £100 million in a Taxpayer Protection Taskforce. The taskforce is expected to recover £800 million to £1 billion from fraudulent or incorrect payments over the next two years. This is in addition to the £536 million already recovered by HMRC in 2020-21. After this point, HMRC will continue to address fraud in the schemes through wider compliance activity.
The Government designed these schemes to prevent as much fraud as possible before any payments were made, while still supporting those who needed it as quickly as possible in unprecedented circumstances. As a result, the economy is back to pre-pandemic levels and growing at the fastest rate in the G7.
Asked by: Kirsten Oswald (Scottish National Party - East Renfrewshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many and what proportion of payments made under the Coronavirus Job Retention Scheme HMRC have not yet been recorded against a valid National Insurance number; what the value of those payments is; and what his most recent estimate is of when that matching process will be completed.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Covid-19 schemes have helped millions of people and businesses through the pandemic and were part of the collective national effort to protect jobs.
The Government has been clear throughout the pandemic that we should prioritise getting money to those who need it. The schemes were therefore designed to minimise fraud while not holding up payments unnecessarily.
The schemes were designed to prevent fraud before any payments were made, through the eligibility criteria set and in the design of the claims process itself. Our data and risking experts block suspicious claims that show signs of criminal activity.
To qualify for the Coronavirus Job Retention Scheme (CJRS) employers needed a Pay As You Earn scheme and to submit a Real Time Information return. Additionally, for claims with 100 employees or more, employers were required to provide details of the individual employees’ wages.
It is not mandatory to have a National Insurance (NI) number to be employed, therefore not all employees on furlough would have a NI number attached to a claim made by their employer for CJRS.
Considering all of the above, HMRC cannot carry out the level of analysis requested and therefore cannot say what proportion of payments under CJRS have not yet been recorded against a valid NI number.
Asked by: Alison Thewliss (Scottish National Party - Glasgow Central)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the impact of erroneous registration data on its ability to recover payments from fraudulent applications to covid-19 support schemes.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
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.
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.
Departments are required to disclose details of material fraud, evasion and error within their annual report and accounts, which can be found on GOV.UK. From 2021-22, departments must provide an evidenced estimate of the level of fraud and error specifically in respect of the COVID-19 related schemes they administer and the level of debt as a result of that fraud and error.
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.
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.
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.
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.
Eat Out to Help Out 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 move 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.
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.
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.
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.
Asked by: Alison Thewliss (Scottish National Party - Glasgow Central)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many and what proportion of applications to the (a) Coronavirus Job Retention Scheme, (b) Self-Employment Income Support Scheme, (c) Eat out to Help Out, (d) Coronavirus Business Interruption Loan Scheme, (e) Bounce Back Loan Scheme and (f) Coronavirus Large Business Interruption Loan Scheme that were submitted with erroneous registration data has his Department identified as involving fraud.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
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.
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.
Departments are required to disclose details of material fraud, evasion and error within their annual report and accounts, which can be found on GOV.UK. From 2021-22, departments must provide an evidenced estimate of the level of fraud and error specifically in respect of the COVID-19 related schemes they administer and the level of debt as a result of that fraud and error.
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.
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.
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.
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.
Eat Out to Help Out 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 move 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.
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.
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.
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.
Asked by: Alison Thewliss (Scottish National Party - Glasgow Central)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate his Department has made of the number of applications to the (a) Coronavirus Job Retention Scheme, (b) Self-Employment Income Support Scheme, (c) Eat out to Help Out, (d) Coronavirus Business Interruption Loan Scheme, (e) Bounce Back Loan Scheme and (f) Coronavirus Large Business Interruption Loan Scheme that were submitted with erroneous registration data; and how many and what proportion of those applications involve fraud.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
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.
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.
Departments are required to disclose details of material fraud, evasion and error within their annual report and accounts, which can be found on GOV.UK. From 2021-22, departments must provide an evidenced estimate of the level of fraud and error specifically in respect of the COVID-19 related schemes they administer and the level of debt as a result of that fraud and error.
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.
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.
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.
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.
Eat Out to Help Out 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 move 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.
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.
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.
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.
Asked by: Justin Madders (Labour - Ellesmere Port and Neston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will publish a breakdown of the £4.3 billion in fraudulent claims to coronavirus support schemes, by type of support scheme.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
No amount of error and fraud is acceptable, however, not all money lost to error and fraud will be recoverable. HMRC have said from the outset of the schemes that we would not be actively seeking out people who have made an honest mistake. Although of course if an error is identified, then HMRC will work with the claimant to put it right.
HMRC are also taking tough action to tackle fraudulent behaviour. Anyone who keeps grant money despite knowing they were not entitled to it, faces having to repay up to double the amount they received, plus interest and potentially criminal prosecution.
HMRC did not produce and do not recognise the figure of £4.3bn. HMRC’s latest estimate for the amount lost to both error and fraud in the schemes during 2020 to 2021 is 8.7% in CJRS, 2.5% in SEISS phases 1-3 and 8.5% in the Eat Out to Help Out scheme. These estimates do not represent actual amounts lost.
This is HMRC’s current estimate of amounts potentially lost due to error or fraud during 2020/21 only, and these estimates will be updated as more data becomes available with the 2021/22 figures being finalised and released with the Annual Report and Accounts in the summer.
HMRC intend to publish updated E&F estimates for CJRS and SEISS in HMRC’s 2022 Annual Report and Accounts.
HMRC established the Taxpayer Protection Taskforce and is estimated to recover approximately £800m to £1bn in the two years to 2022/23, on top of the c.£500m recovered in 2020/21. HMRC will continue to address fraud and error in the schemes beyond the duration of the taskforce.