Arrests have been made over alleged fraud related to coronavirus support schemes, as HMRC ramps up enforcement action against possible abuse of funding targeted to help businesses throughout the pandemic
HMRC said three men had been arrested at addresses in London on suspicion of cheating the public revenue and fraud by false representation, with the allegations linked to the Eat Out to Help Out scheme which ran in August.
The scheme offered a 50% discount of up to £10 per person on meals in cafes and restaurants to boost the hospitality sector. It did not require diners to download a voucher to qualify – participating outlets registered directly with HMRC, and claims were made for more than 100m meals in the UK.
Another three people have also been arrested in the Birmingham area after they were accused of fraudulently obtaining £145,000 through the bounce back loan scheme for companies affected by the pandemic.
All three suspects were questioned and have since been released under investigation, the National Crime Agency (NCA) said.
The bounce back loans were provided by private sector lenders with a 100% state guarantee on loans to qualifying small companies of up to £50,000, or a maximum of 25% of annual turnover, at an interest rate of 2.5%. The loans are interest-free for a year.
Kath Doyle, deputy director of HMRC's fraud investigation service, said: ‘The vast majority of businesses will have used Eat Out to Help Out responsibly, but we will not hesitate to act where we suspect abuse of the scheme.
‘This is taxpayers' money, and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding.’
These arrests are likely to be the first of many. Last month the National Audit Office warned that business defaults and fraud could result in potential losses of £15bn to £26bn from the bounce bank loan scheme, and highlighted risks it could also have been abused by organised crime gangs.