UK Budget 2021: Chancellor formally announces taskforce to investigate COVID-19 business support claims

Over the past year, the UK Government has implemented a number of unprecedent initiatives to help businesses weather the pandemic, the best known of which is perhaps the Coronavirus Job Retention Scheme (CJRS) (better known as the ‘furlough’ scheme). The Taxpayer Protection Taskforce will now police the full range of taxpayer-funded COVID-19 business support schemes, including the CJRS but also (amongst others) the Self Employment Income Support Scheme, the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme and the Coronavirus Large Business Interruption Loan Scheme.

Reports of a further crackdown on error and fraud have been circulating in the press over the last few days following a pre-Budget announcement made over the weekend. The Government has now formally announced what it describes as ‘one of the largest responses to a fraud risk by HMRC’, adding that it will raise awareness of enforcement action and ‘significantly strengthen’ law enforcement for Bounce Back Loans. The Budget announcement also laid bare the reason for the Government’s renewed focus on recouping funds where possible - with the highest level of peacetime borrowing and COVID-19 support schemes such as the CJRS to be extended well beyond the current roadmap out of the crisis.

We are already seeing compliance checks from HMRC but both civil and criminal investigations are now expected to be launched with ever increasing force. Claims made in relation to the COVID-19 support schemes, even if made in good faith, may face sanction if mistakes were made with the application process, ongoing compliance requirements or record-keeping.

In order to ensure there are no surprises when HMRC conduct a compliance check or investigation, businesses that have benefitted in any way from COVID-19 business support schemes would be well-advised to assess their potential risk.

Bird & Bird offers a COVID business support risk assessment that allows you to share details of the support schemes used and highlights potential issues to be aware of in order to prepare for any check or investigation by the new Taxpayer Protection Taskforce. The data will be collected by members of our specialist Tax Disputes and Investigations team, which is dedicated full time to the resolution of disputes with tax authorities and offers unique access to tax specialists in addition to strength in defending criminal prosecutions brought by HMRC. We have a wealth of experience leading complex disclosure projects, undertaking forensic internal investigations with clients for the purpose of error disclosure and mitigation. Our expertise in disclosure projects means we are able to quickly understand and advise clients on how to deal with risks that arise in difficult circumstances, in particular where deliberate or fraudulent behaviour is alleged or suspected.

For more information about the COVID business support risk assessment, please click here.