Now fraud hits £258m self-employment grants

Just days after official figures showed fraudsters could have creamed off £1.9 billion from the Bounce Back Loans scheme it has emerged that as much as £258 million in self-employed grants could have been ‘fraudulent or paid in error’.

Her Majesty’s Revenue & Customs (HMRC) estimates that between 1% and 2% of the £12,9 billion paid out under the Self-Employment Income Support Scheme (SEISS) has been lost due to fraud or has been paid in error.


It is believed that ‘accidental overpayments’ or criminals making a claim in someone else’s name are responsible for the losses.

But HMRC says it is confident that a system designed to prevent wide-scale fraud has worked.


One fraudulent claim came to light when self-employed environmental consultant Andy Charles made a claim only to find someone else had already done so.
He said: “My initial reaction was just complete shock really.

The application process is quite long and includes a lot of personal details, so to come to the end and be told this payment had already been applied for was quite shocking. The mind boggles really.”


Despite a second fraudulent claim in his name being discovered, Mr Charles eventually received two grants which have helped him to get through his financial problems caused by the pandemic.

But he is still concerned about how the criminals were able to find his personal details and use them to make the claims and about what else might happen.

Big questions

He said: “There are some real big questions about how the online system works and how HMRC are dealing with this type of stuff at their end.

“I’m still a little bit worried about what else people can get into. So can they just get into my personal tax details, is there anything else I’m not aware of?”

Only an estimate

HMRC said the overall figure is only an estimate and should be treated with caution, adding: “We built controls into the application process, including limiting eligibility for the scheme to those who already had a tax footprint with HMRC, to stop fraudulent claims and we’re confident that we’ve prevented large amounts of fraud.

“Our post-payment compliance checks to recover money paid out are set to begin, with the focus on those who claimed despite having no active business.”

Serious matter

Andrew Chamberlain of the Association of Independent Professionals and the Self-Employed, said the misallocation of government funds is ‘always a serious matter’.
He added: “Here it’s particularly concerning because this is grant money that could be helping the more than a million struggling self-employed people who are excluded from government support.”