Around 4,000 hospitality businesses face EOTHO fraud checks

By Stuart Stone contact

- Last updated on GMT

Compliance checks: HMRC is writing to selected EOHO claimants stating that they may need to repay some or all of the funds they received under the Government-backed EOTHO scheme
Compliance checks: HMRC is writing to selected EOHO claimants stating that they may need to repay some or all of the funds they received under the Government-backed EOTHO scheme

Related tags: Legal, Legislation, Food, Coronavirus

HM Revenue & Customs (HMRC) is to begin compliance checks on Eat Out to Help Out (EOTHO) payments at approximately 4,000 hospitality businesses as it looks to recoup funds paid in error.

As part of post-payment measures to recover money distributed incorrectly, HMRC is writing to selected EOHO claimants stating they may need to repay some or all of the funds they received under the Government-backed scheme.

In the region of 84,700 hospitality businesses signed up to EOTHO, making in the region of 130,000 claims worth £522m. 

The scheme was also found to have pumped more than £250m​ into the Treasury and is credited with saving thousands of jobs.

However, HMRC has announced that it will be contacting businesses in an effort to determine whether or not they claimed for more EOTHO payments than they were entitled to. 

The basis for a follow up check could be a query relating to amounts claimed and the data held about the payments received by credit and debit card, one or more claims being inconsistent with others that have been made, a failure to meet conditions to claim or receive payments, or other compliance risks noted when a manual EOTHO claim was made. 

Some operators may be asked to provide evidence of eligibility and their EOTHO calculations in keeping with a similar approach taken to post-payment compliance for the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme. 

Claimants contacted will have 60 days to respond or HMRC says it may start a formal compliance check, which could include having to pay statutory interest and penalties.

As reported by The Morning Advertiser (MA)​, the discount meals scheme – which allowed operators to offer customers a 50% discount, up to a maximum of £10 per person, all day, every Monday, Tuesday and Wednesday between 3 August and 31 August for food and non-alcoholic drinks consumed on site – saw more than 100m meals​ claimed in less than a month. 

Earlier this month three people were arrested on suspicion of fraud related to the scheme. 

Gimmick or sector lifeline?  

Though initially dismissed as a “gimmick”​ by some, data from Streetbees and restaurant booking app OpenTable found the EOTHO scheme could be among the Government’s most effective Covid-19 crisis policies. 

A survey by global intelligence platform Streetbees found of the respondents who had dined out on Chancellor Rishi Sunak’s Eat Out to Help Out scheme, almost two thirds (60%) wouldn’t have done so had it not been for the 50% discount​. 

What’s more, OpenTable data highlighted by the Centre for Economics and Business Research (CEBR) found in the first two weeks of the scheme the number of people eating in restaurants between Monday and Wednesday increased by 26.9% year-on-year on average.  

Additionally, figures from hospitality software provider Fourth found that the Government-backed scheme increased the scheduled hours worked by hospitality staff from 12.9m in July to 20.1m in August – an extra 821 years’ worth of extra work​. 

The data, which was drawn from Fourth's analysis of over 700 companies across the restaurant, pub and bar, and fast-food restaurant sectors, found the 20.1m hours worked in August was only 41% down on 2019 when 34.2m scheduled hours were worked. 

Such was the popularity of the EOTHO scheme, that a number of pub operators – including Oakman Inns, Revolution Bars and Arc Inspirations – funded their own version of the scheme throughout September and October in a bid to drive footfall.

Related topics: News

Related news

Show more

Spotlight

Follow us

Pub Trade Guides

View more

FREE EMAIL NEWSLETTER

Subscribe to The Morning Advertiser

The definitive voice for the pub trade

Get the latest news, analysis and insights from the uk pub sector straight to your inbox!