Forensic accountant Hinesh Shah of Pinsent Masons was commenting following the launch of a new government scheme to enable businesses and individuals in receipt of Covid-19 financial support to pay back money they were either not entitled to or did not need.
Under the terms of the scheme, which is being administered by HM Treasury, recipients of pandemic support scheme money will be granted a ‘no questions asked’ repayment window to return any outstanding funds by December 2025.
After this period, the government says tougher sanctions, including prosecution, director disqualification and compensation orders, will apply to those that fail to come forward “when the government receives additional investigatory powers next year”.
The voluntary repayment scheme marks an opportunity for businesses to take a proactive approach to get their affairs in order and potentially avoid future legal or financial consequences, says Shah. “Businesses should treat this as more than a financial clean-up – there are reputational and regulatory consequences for those who ignore it,” he said. “Voluntary repayment now could prevent future scrutiny from regulators, auditors or even investors.”
The scheme applies to both businesses and individuals who received Covid-19 financial support in the form of loans, grants, social security and tax benefits and believe they may have claimed more than they were entitled to during that period. Shah encouraged all business owners to review the support they received and assess whether any funds were wrongly claimed or no longer required.
The move comes as the government attempts to recoup billions of pounds it believes were lost during the pandemic due to “fraud, flawed contracts and waste under the previous government’s mismanagement of pandemic era procurement and schemes”. The government says it has already recovered £1.54 billion, but official figures indicate nearly £10 billion was wasted on defective or unusable personal protective equipment during the pandemic.
A dedicated Covid-19 fraud reporting website has been created where members of the public can report any suspected fraud.
Shah said the repayment scheme and the reporting website were both in keeping with the government’s continued approach to encourage self-reporting. “This Covid repayment window mirrors HMRC’s approach to cryptoassets – offering a time-limited opportunity to come forward voluntarily before harsher penalties apply,” he said. “It’s a clear signal that the government is prioritising recovery and compliance, but is encouraging early transparency.”