The Treasury recently launched a Voluntary Repayment Scheme (on 12th September), offering recipients of pandemic support schemes a 'no questions asked' period to repay money they were not entitled to, or did not need.
This follows one of Labour's manifesto pledges, to use “every means possible” to recover public money lost through Covid fraud and error. The government has framed the scheme as a 'use it or lose it' opportunity to come forward voluntarily before enforcement powers and prosecutions begin.
Individuals and businesses now have until December 2025 to return any funds received through Covid-19 support programmes without penalty.
Why has the scheme been launched?
During the peak of the pandemic, billions of pounds were rapidly paid out through furlough, self-employed grants, Bounce Back Loans, and other support measures. While some of these lifelines kept businesses afloat, the pace of delivery meant that errors, over-claims, and in some cases fraud, inevitably took place.
The government is now under pressure to close the gap and recover the money lost. By offering this voluntary repayment route, HMRC and other departments hope to encourage businesses and individuals to self-correct, rather than waiting for compliance checks or criminal investigations.
Did you take out a loan?
For many small businesses, the pandemic was chaotic and uncertain. Applications were rushed and advice changed quickly and often.
The Voluntary Repayment Scheme seems to have been launched in recognition of this reality. It gives businesses the chance to take a fresh look at their claims and repay any money they shouldn't have had, without fear of being penalised for honest mistakes.
Which schemes are involved?
All Covid schemes fall under the voluntary repayment scheme, some of these include:
- Bounce Back Loan Scheme (BBLS)
- Coronavirus Job Retention Scheme (CJRS) (Furlough)
- Business support grants
- Local government grants and benefits (such as universal credit)
- Eat Out to Help Out
- Cultural Recovery Fund (CRF)
What businesses should do now
If you or your business benefited from Covid-19 support, this is a chance to review your position before enforcement begins. Ask yourself:
- Did we apply in a rush, without being fully certain of eligibility?
- Did our circumstances improve faster than expected, meaning we didn't really need all of the support?
- Were there areas where our claim may not have been 100% correct?
If any of the above relate to you, it may be worth seeking advice and consider repayment under the voluntary scheme.
Make a Voluntary Repayment of COVID-19 Funding
Final thought
The government's message seems clear: Individuals and businesses should come forward now or face tougher consequences in the future. For many honest businesses, this scheme offers a safe way to put things right without worries of repercussion.
Useful links and sources:
Make a Voluntary Repayment of COVID-19 Funding
HM Treasury coronavirus (COVID-19) business loan scheme statistics
Covid repayment window opens