MPs have criticised HMRC's approach to tackling furlough fraud after the tax authority recovered a fraction of fraudulent claims.

HMRC estimates it paid around £2.3 billion to employers claiming furlough for staff who continued to work during the pandemic. So far, the tax authority has only recovered £640,000 - 0.03% of the total estimated fraud.

According to the Public Accounts Committee (PAC), these levels of unrecovered fraud are "far too high".

Furthermore, the extent of error and fraud was particularly disappointing because millions of people affected by the Covid-19 pandemic were not eligible for the scheme.

HMRC is now winding up the taxpayer protection taskforce, claiming that this is the "most efficient" way to recover and protect taxpayers' money.

However, the PAC urged HMRC to act, saying:

"HMRC must now send a clear message that it is committed to recovering fraud on these schemes through its tax compliance enquires, and urgently increase the rate of repayments from those who overclaimed, including pursuing and penalising those who made fraudulent claims."

In a report in October 2022, HMRC said that while it aims to tackling error and fraud in the Covid-19 support schemes, it is "not possible" to recover everything.

Talk to us about your business.