UP to £4billion of Covid loans and grants swindled by fraudsters will be written off, MPs say.
In a scathing report, the MPs warn the soft touch approach sends the wrong message to criminals as well as cheating honest taxpayers.
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The claim will pile pressure on the Treasury to launch a fresh crackdown.
The Public Accounts Committee took aim at HMRC’s “unambitious plans” for recovering £6billion it paid incorrectly.
It says the taxman expects to recover as little as £2billion — and will take years to get through the backlog.
Dame Meg Hillier MP, head of the committee, said: “We can ill-afford to be so cavalier over so much taxpayers’ money.
“Every taxpayers’ pound lost to a fraudster will lead to honest ordinary people feeling the post-pandemic pinch harder and harder.”
It is a blow to Chancellor Rishi Sunak, already under pressure over Covid cash fraud, which led to Lord Agnew quitting in disgust at the lack of action.
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But a Government official rejected the report and said no money had been written off.
They insisted: “Most error and fraud was legitimate claimants making mistakes or inflating their claims.”
