Government warns 4,000 companies they face Eat Out to Help Out probe

Government officials have warned about 4,000 companies to be investigated if they are unsure that claims under the Eat Out to Help Out program are valid.

HM Revenue and Customs (HMRC) said it was sending letters to companies that may have made an incorrect claim.

It comes amid serious fraud concerns among many of the government’s support schemes designed to help more than a million businesses get through the Covid-19 pandemic.

“Plaintiffs have 60 days to respond to the letter, otherwise we can initiate a formal compliance check. This may include paying statutory interest and fines, ”HMRC said in a statement Wednesday.

Companies are asked to check their records to see whether they met the conditions of the scheme, but also to check whether they claimed more than they were entitled to.

The letter encourages transparency and adds, “We understand that mistakes happen, especially in these difficult times. This means we don’t look for harmless mistakes and minor errors for compliance action. “

Officials have warned that billions of pounds could be lost to fraudsters and unfairly disbursed under government schemes launched during the lockdown earlier this year.

Jim Harra, CEO of HMRC, told MPs that the fraud and error rate for the leave scheme could be between 5% and 10%. More than £ 41 billion has been awarded on leave.

Meanwhile, official estimates show that between £ 15 billion and £ 26 billion should never be repaid to lenders from loans taken out under the government-guaranteed repayment loan.

More than 84,000 food and beverage outlets participated in the Eat Out to Help Out program, which contributed up to £ 10 per customer meal on some days in August.

The plan has been criticized for encouraging people to come out of their isolation and visit potentially packed restaurants with Covid-19 cases increasing in the aftermath.