Eat Out to Help Out Fraud Investigations are a focus currently of HMRC. They are reviewing the conduct of businesses that participated in the Eat Out to Help Out Scheme, and will investigate those who are suspected of filing fraudulent claims.
If HMRC has contacted you in relation to fraud, or you are concerned that mistakes were made, please contact us at Altion Law. We offer a free, confidential discussion with an experienced solicitor.
Eat Out to Help Out Scheme
More than 84,000 food and drink establishments participated in the UK government’s Eat Out to Help Out Scheme. Customers were offered up to 50% off their bill, capped at a £10 discount per head. The business could then claim back the discount from the Treasury.
Businesses who participated in the scheme had to meet strict criteria, such as:
- Only applying the discount to food and drink consumed on the premises
- Not applying the discount to alcoholic beverages or takeaway orders
- Recording the number and value of transactions taking place under the scheme
Eat Out to Help Out Fraudulent Claims
The Taxpayer Protection Taskforce is now reviewing the authenticity of claims made under the EOTHO scheme. Any business that claimed incorrect payments will be told to repay the funds by a certain deadline, or risk late payment penalties.
Those who are thought to have intentionally abused the system will be investigated and penalised, if allegations of fraud are upheld. Examples of fraudulent activity might include:
- Claiming on meals that were ordered as a takeaway
- Claiming the discount on alcohol
- Creating false receipts for fake orders
- Pretending to be closed for business and claiming furlough payments, while also participating in the Help Out to Eat Out Scheme
Take Early Action
HMRC has encouraged all restaurant owners to check their records and come forward, if errors have been made. It is giving businesses a grace period in which to repay funds, although there are strict time limits involved. If you find error and feel you could be contacted regarding Eat out to help out fraud investigations, you should:
- Contact HMRC within 90 days of discovering that error; and
- Return the money by 31 January 2022, if you are a sole trader or partner; or
- Return the money within 12 months from the end of your accounting period, if you have a company
If genuine errors were made and you take early action to remedy the situation, HMRC will likely show leniency. You will be asked to repay the incorrect payments, but may escape having to pay interest and other penalties.
HMRC is cross-referencing claims made by businesses with other records. This is including PAYE records, tax returns and debit card data. It will then carry out a tax assessment and determine whether an overpayment has been made. You will be notified of this decision, and asked to repay the funds within 30 days. Late payments will accrue interest, with other possible penalties available.
Even if HMRC does not contact you but you are aware that mistakes have been made, then the burden is on you to report the mistake to HMRC. You will then have to repay the funds by the necessary deadline. Partners of companies, and directors of insolvent companies, may be personally liable for the outstanding debt.
Those who are thought to have deliberately made an incorrect claim could face additional penalties. Especially if HMRC decides to pursue a criminal investigation, as opposed to a civil investigation.
If you are told to repay funds but you disagree with HMRC’s decision, you have 30 days to make an appeal.
Civil and Criminal Investigations
HMRC has wide-ranging powers of investigations, including the ability to apply for and execute search warrants. It can also choose between pursuing a civil investigation and a criminal investigation. The latter of which is more likely where there is a significant level of dishonesty.
Business owners should take these investigations seriously. Arrests have already been made. For those who are prosecuted could face charges of fraud by false representation, false accounting and conspiracy to defraud.
Get Expert Legal Advice
If you have received any communications from HMRC in relation to fraud, or are concerned you may receive these communications in the near future, contact us Altion Law. We specialise in HMRC Tax Investigations and offer expert legal advice.
If you would like to have a free confidential discussion with a member of our team, please either make a Free Request For Call Back . Alternatively, call us directly on 01908 414990 and we will be pleased to help you.