Rishi’s £100million war chest to catch the Covid fraudsters

After scammers grab cash meant for hard-hit firms...

RISHI Sunak is to launch a £ 100million taskforce to crack down on Covid fraud.

The Chancellor will use next week’s Budget to unveil plans for the new unit following criticism that the furlough and business loans schemes have been left wide open to exploitation by fraudsters.

The new Taxpayer Protection Taskforce will have 1,265 staff and be based in HM Revenue and Customs (HMRC).

It will focus on tracking down the criminal gangs thought to have stolen billions of pounds by posing as legitimate businesses.

Rogue employers who have claimed cash under false pretences will also be targeted and an advertising campaign will remind fraudsters that they face the threat of prosecution if they are caught. It also emerged that:

■ Mr Sunak is considering a raft of stealth tax rises on the better off in the Budget on Wednesday;

■ He is poised to extend a five-year freeze on the £1million lifetime allowance for pension savings until at least the next election, hitting around 1.2million people;

■ The Chancellor is expected to freeze the £50,000 threshold for higher rate tax, potentially dragging a further 800,000 people into the 40p rate;

■ Firms will be offered up to £3,000 a head to take on new apprentices in a move designed to create an extra 40,000 apprenticeship places in the coming months;

■ Mr Sunak will also introduce new ‘flexible apprenticeships’ allowing young people to work with more than one employer;

■ The Centre for Brexit Policy think-tank called on the Chancellor to slash corporation tax to 10 per cent to exploit the UK’s new freedoms outside the EU;

Tony Blair joined another former prime minister, David Cameron, in warning the Government against any significant tax increases.

Next week, the Chancellor is expected to extend most existing Covid support schemes until the summer in line with the Government’s ‘roadmap’ for unlocking the economy. With the cost of the furlough scheme alone now exceeding £ 50billion, the extension is expected to cost tens of billions of pounds.

Commenting on the antifraud taskforce, Mr Sunak said: ‘Our coronavirus support schemes have helped millions of honest, hard-working people, but a small minority have seen this pandemic as an opportunity to defraud the taxpayer. This will not be tolerated, which is why the new taskforce will crack down on this criminal activity.’

Although the Covid support schemes are credited with saving millions of jobs and keeping many businesses afloat, ministers have faced stinging criticism from auditors and MPs over lax rules that have made them easy for criminals to exploit. HMRC estimates that up to 10 per cent of furlough cash may have been claimed fraudulently, a sum now equal to more than £5billion.

Some experts have predicted that up to half of the £45billion lent under the Bounce Back Loans scheme may be lost to defaults and fraud.

Officials have already begun 10,000 investigations into suspected fraud, but insiders acknowledge they represent the tip of the iceberg.

Mr Sunak’s announcement means that the number of officials working on Covid fraud will rise from 700 to 1,265.

The Treasury last night insisted that HMRC ‘already have a rigorous system in place to counteract fraud, working through payment data, PAYE records, and reports from the public to identify potential wrongdoing’.

‘This will not be tolerated’

WHEN Rishi Sunak rises to the despatch box on Wednesday, he could be forgiven for permitting himself a wry chuckle.

A year ago, the wet-behind-the-ears new Chancellor unveiled his Covid Budget. To protect jobs and businesses from economic Armageddon, he splurged £30billion.

That sum had many rubbing their eyes in disbelief. Today, it resembles loose change.

The borrowing binge to keep the country afloat during the pandemic is now forecast to hit £400billion, while national debt is a terrifying £2trillion and counting.

Covid-19 has turned the Conservative mantra of responsible public finances on its head. Of course, it would be deeply unfair to chide Mr Sunak for this. If he hadn’t administered fiscal adrenaline, our economy might be beyond resuscitation.

Now with Britain’s vaccine drive so advanced, we have a unique launchpad for recovery once lockdown lifts. This is grounds for fizzing optimism. Britain is a ‘coiled spring’, says the Bank of England, ready to bounce back. To squander this golden opportunity would be unforgivable.

The Chancellor, though, is said to be tempted to start paying off the astronomical debt through punishing levies.

The Mail implores him: Rethink. There is no surer way of stifling the recovery than becoming tangled in the weeds of feel-bad taxes. They would choke business investment, lower wages, kill job creation and scupper consumer confidence at the worst possible moment.

Raiding pensions, meanwhile, would be unbridled madness. What message would that send? Prudently save for old age, and the Treasury will plunder it.

History teaches us that high taxes ultimately yield lower returns.

Celebrating the virtues of a low-tax state and rewarding initiative are the very foundations of Conservatism. Raising taxes cedes the intellectual argument to Labour – economic and political suicide.

Mr Sunak should instead put some zip behind the recovery, going for VAT cuts, support for the young unemployed, R&D tax breaks and holding off on the restoration of business rates.

Obviously, the country cannot borrow unchecked forever. On Wednesday, Mr Sunak should be honest with voters. The bill must eventually be repaid.

But tax shocks should be delayed until Britain emerges fully from lockdown’s shadow. Slamming the brakes on now would be foolhardy. Only by revving up growth can we hit the highway to prosperity.