Up to £4billion in Covid loans and grants defrauded by fraudsters will be cancelled, MPs say.
In a scathing report, MPs warn that the soft approach sends the wrong message to criminals and misleads honest taxpayers.
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The claim will pressure the Treasury to launch a new crackdown.
The Public Accounts Committee has come down to HMRC’s ‘unambitious plans’ to recover £6billion it wrongly paid.
It says the tax authorities expect to recover as little as £2billion – and it will take years to clear the backlog.
MP Dame Meg Hillier, leader of the committee, said: ‘We cannot afford to be so cavalier with so much taxpayers’ money.
“Every taxpayer pound lost to a tax evader will cause honest ordinary people to feel the post-pandemic pinch harder and harder.”
It’s a blow to Chancellor Rishi Sunak, already under pressure from Covid cash fraud, which led Lord Agnew to resign in disgust at the lack of action.
But a government official dismissed the report and said no money had been written off.
They insisted: “Most of the errors and frauds were legitimate claimants making mistakes or inflating their claims.”
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