Eat Out To Help Out Scheme Fraud

To boost to the hospitality sector, the Government offered a 50% contribution of up to £10 per diner on all food and non-alcoholic drink sales between 3rd and 31st August 2020. The discount value was applied by eligible businesses directly to customer bills and claimed back from the Government within the terms of the Scheme.

In all, businesses made claims for around 161 million meals served to a total value of around £850 million.

Given the nature and hurried introduction of the scheme, claims were made through a very simple “self-assessment” process and were paid by the Government on a “pay now check later” basis.

Inevitably, this resulted in a number of errors being made within claims, for example:

• Claimants being ineligible to claim under the scheme but making a claim anyway;
• Claimants being eligible to claim but over claiming more relief than correctly due;
• Claimants deliberately providing inaccurate or incorrect information to make fictitious or overstated claims.

HMRC allowed 90 days for businesses to repay any incorrectly claimed amounts. Those guilty of not doing so are liable to repay all the incorrectly claimed amount, as well as interest plus a penalty of up to 100% of the excess amount. In some cases prosecution is considered depending on the severity.

As of November 2020 (anything more recent?), HMRC had already issued “nudge letters” to over 4,000 businesses that it is concerned may have made incorrect claims, several of which have resulted from “tip-offs” from third parties and disgruntled staff members who have “whistle blown” to HMRC. The nudge letter is designed to prompt individuals who HMRC suspect have not acted honestly in their tax affairs.

If you received a letter from HMRC regarding this, but disagree, get in touch for a free initial consultation so we can review your position.