Brokers, businesses and sole traders who wrongly claimed Covid-era financial support have been warned they have until 31 December to come forward or face prosecution as the government prepares a renewed clampdown on pandemic fraud.
The Covid Voluntary Repayment Scheme, which allows individuals and companies to repay support they were not entitled to or no longer needed, will close at 11:59pm on New Year’s Eve.
From early 2026, a new specialist fraud team is due to begin investigations into unpaid support, with the power to levy instant 100% fines and pursue criminal prosecutions in the most serious cases.
Officials said momentum behind enforcement is building. Around 300 allegations of suspected Covid fraud worth £35m have been reported since the launch of a new reporting hotline in September, all of which will be examined by the new team in the coming months.
PUT IT RIGHT NOW
Chancellor Rachel Reeves (main picture, inset) said: “The message is clear – if you wrongly claimed, put it right now.
“This money belongs to your local community – our NHS, our schools and our vital public services took tax-payer-funded help they weren’t entitled to and who fails to come forward will face the consequences.”
The scheme covers the Coronavirus Job Retention Scheme, the Self-Employed Income Support Scheme, Eat Out to Help Out, cultural and business grant programmes and Covid loan guarantee schemes including Bounce Back Loans. Ministers are urging borrowers to contact their lender or the relevant department to arrange repayment or agree a plan.
REDUCED PENALTIES
Those who voluntarily repay now may face reduced penalties and interest compared with those identified later through enforcement.
However, the Treasury said that where fraud or deliberate abuse is suspected, cases could lead to civil or criminal action.
Businesses struggling to meet repayments are being advised to seek agreements with lenders, including “Pay As You Grow” options for Bounce Back Loans, or to obtain free debt advice.
The government said failing to engage increases the risk of recovery action as investigators “close the net” on Covid support over-claimants.
