4,000 restaurants asked to check Eat Out claims amid fraud worries

Government officials have warned around 4,000 companies that they face investigation if they do not ensure claims under the Eat Out to Help Out scheme are accurate.

HM Revenue and Customs (HMRC) said that it was sending letters to businesses that might have made an incorrect claim.

It comes amid serious concerns of fraud among many of the Government’s support schemes that were designed to help more than a million companies through the Covid-19 pandemic.

“Claimants have 60 days to respond to the letter or we may start a formal compliance check. This could include having to pay statutory interest and penalties,” HMRC said in a statement on Wednesday.

Companies are being asked to check their records to ensure they met the conditions of the scheme, but also to check if they claimed for more than they were entitled to.

The letter encourages transparency and adds: “We understand mistakes happen, particularly in these challenging times. This means we will not look for innocent errors and small mistakes for compliance action.”

Officials have warned that several billion pounds could be lost to fraudsters and paid out in error under Government schemes that were launched during lockdown earlier this year.

Jim Harra, chief executive of HMRC, told MPs that the fraud and error rate for the furlough scheme could reach between 5% and 10%. More than £41 billion has been granted under furlough.

Meanwhile official estimates show that between £15 billion and £26 billion may never be paid back to lenders from loans that were taken under the Government-guaranteed Bounce Back Loan Scheme.

More than 84,000 food and drink establishments took part in the Eat Out to Help Out scheme, which contributed up to £10 per customer meal on some days in August.

The scheme has been criticised for encouraging people to come out of isolation and visit potentially packed restaurants with Covid-19 cases soaring in the aftermath.