While HMRC had by October 2022 exceeded its target to open 30,000 civil cases on the employment support schemes during 2020–21 to 2022–23, the level of penalties it has issued has been small compared to both the overpayments it has identified and the billions of pounds of error and fraud. By March 2022, HMRC had issued £3.5 million of penalties to those who overclaimed SEISS grants (the equivalent of 7% of total overpayments identified through its civil cases covering SEISS). For CJRS the figure was £1.1 million (0.5% of CJRS overpayments).41 We challenged HMRC about its approach on penalties as we were concerned that it does not provide an incentive for those who have identified they made an error in their claims to make a repayment. In particular, we asked HMRC why it had not issued penalties in four cases where the NAO found there were strong 34 C&AG’s Report paras 30.20, 3.36–3.37 35 For example, Committee of Public Accounts, Tackling tax fraud, 34th Report of Session 2015–16, HC 674, April 2016, pages 5 and 6; and Committee of Public Accounts, Collecting tax from high net worth individuals, 36th Report of Session 2016–17, HC 774, page 6 36 Public Accounts Committee, Fraud and Error, Ninth Report of Session 2021–22, HC 253, 30 June 2021 37 Qq 52, 84–86; C&AG’s Report, para 3.36 38 Q 84 39 Letter from Janet Alexander, Director, Compliance Operations, HM Revenue & Customs, to Chair of the Committee of Public Accounts, 21 November 2022 40 Qq 57, 84–86 41 C&AG’s Report, paras 3.26, 3.38 COVID employment support schemes 15 indications that claimants may have deliberately inflated claims beyond their entitlement.42 HMRC said that it was not enough to be suspicious or sceptical about a claim - it had to demonstrate that a person deliberately made a false claim or over an over-claim to impose financial penalties. If a case went to Tribunal it would need evidence that the false claim or over-claim was deliberate. HMRC accepted that fraud may have occurred in the four cas