We raised the point that there was a moral duty and fairness issue to pursue fraud with, for example, some companies getting an unfair competitive advantage through their abuse of the schemes. HMRC said that it looks into every single allegation of fraud, drawing together other supporting data such as business performance. HMRC said that its controls had been effective at preventing organised crime from abusing the support schemes. It has found that a higher proportion of the losses than it first thought is due to error, rather than fraud, by a large number of fairly small concerns. HMRC said this affects the cost-effectiveness of recovering the losses, because it has to investigate a larger number of people. It said the rate of return it can expect from this activity is less than if it spent the same investment on tax compliance.16 VAT registration