Government failed to counter fraud in Spring statement, says Hudson Contract

Hudson Contract, one of the largest private sector payees of tax in the UK, has hit out at what it claims are failures to strengthen counter-fraud measures in the Spring Statement.

The £1.8bn-turnover company manages the biggest payroll in the construction industry and every year sends hundreds of millions of pounds in taxes to HM Revenue & Customs.

Founder and chairman David Jackson said: “The Chancellor said we will spend a record £83 billion on debt interest in the next financial year and yet the Government is losing £29 billion to fraud every year.

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The Chancellor Rishi Sunak's Spring Statement has prompted Parliamentary debate about the fate of Britain's economyThe Chancellor Rishi Sunak's Spring Statement has prompted Parliamentary debate about the fate of Britain's economy
The Chancellor Rishi Sunak's Spring Statement has prompted Parliamentary debate about the fate of Britain's economy
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“How many businesses could afford to squander such money? Many companies are operating on tight margins and if they fail to collect the income they have invoiced, they go bankrupt and the directors lose their jobs. But in this case, the taxpayer is left to pick up the bill.

Mr Jackson added: “Fraud is the biggest black hole in government and is right in front of the chancellor and his team at the Treasury but it is not being sufficiently addressed. As households and businesses get squeezed, this is the most galling thing missing from the Spring Statement.

“We have first-hand evidence of fraud not being countered by HMRC, which has been going on for years. If the government can sanction an oligarch and freeze his assets, why can’t they do it to fraudsters and their limited companies, luxury houses and Lamborghinis?”

A HM Treasury Spokesperson said: “Fraud is totally unacceptable, and we’re taking action on multiple fronts to crack down on anyone who has sought to exploit our schemes and bring them to justice.

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"Our Covid support schemes were implemented at unprecedented speed to protect millions of jobs and businesses at a time when families needed it the most. As a result, our economy is back to pre-pandemic levels and growing at the fastest rate in the G7.”

The Treasury spokesman said: “Last year we stopped or recovered nearly £2.2 billion in potential fraud from the Bounce Back Loan Scheme and £743m of overclaimed furlough grants. We’ve also invested over £100m in a Taxpayer Protection Taskforce made up of nearly 1,300 staff – which is expected to recover an additional £1 billion of taxpayers money.”

The spokesman added that nearly 12 million people were supported through the furlough scheme and 1.5 million businesses through the Bounce Back Loan Scheme “many of which may not have otherwise survived”.

The statement added: "Thirteen thousand one-to-one fraud and error enquiries were opened in 2020/21 and HMRC wrote to 75,000 people. We have so far stopped or recovered £743m of overclaimed grants in 20/21.”

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"The measures we put in place countered the threat from organised crime – just 0.3% of the Coronavirus Job Retention Scheme grants paid were estimated to be lost to organised criminals. While any amount is too much, given the scale of the support provided, this was an effective response."

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