Implementing employment support schemes in response to the COVID-19 pandemic

To learn from their experience in implementing the employment support schemes, and to protect taxpayer interests HM Treasury and HMRC should: a) consider how to ensure that reliable data covering as many people as possible can be used to determine eligibility so that fewer people suffering loss of income are excluded from future similar schemes;

b) monitor how far employment support schemes protect jobs, recognising that the approach may need to adapt rapidly in response to how the pandemic evolves over the coming months;

c) increase the emphasis on using preventative controls for tackling fraud and error in the new schemes. Where appropriate for future schemes, carry out more direct work with employees to ensure employers treat them according to scheme rules, and increase visibility of which employers use employment support schemes;

d) more quickly assess the total value of error and fraud; and explore the feasibility of commencing assessment activity earlier for future schemes so that some testing is undertaken while schemes are live;

e) review whether a faster programme of recruitment and training can be provided for grant compliance staff, recognising that the activity may differ to tax compliance work; and

f) review how to organise HMRC’s compliance response to ensure that sufficient resources are committed to recover overpayments and fraudulent payments on both schemes where it is cost-effective to do so.

As the COVID-19 pandemic continues, leading to ongoing uncertainty, the Departments may need to develop longer-term plans to support businesses and jobs which will involve balancing speed of response with risks to value for money. This includes targeting support to those who need it, treating employees in accordance with the scheme rules, and reducing fraud and error. In balancing these, the Departments should: g) ensure that their consideration of options, including under the JSS and extended schemes, are sufficiently well-documented to demonstrate how risks to value for money have been considered and resultant risks are clearly understood and managed;

h) specify how performance and value for money will be judged as the schemes progress, monitoring outcomes and adapting arrangements quickly if required; and

i) consider how HMRC should organise its systems and capabilities to provide this targeted support, which may require different choices in digitising the tax system, more frequent filing of tax return data, better linking of customer records, and changes to customer services.