Pandemic business loan fraud losses rise by £500m

More than 10,000 additional cases of suspected Covid loan fraud have been identified following a government review of settled loans.

The British Business Bank review of loans which had been defaulted on and settled by the Government shows that the number for the 2023 financial year has almost doubled from 16,846 to 31,437.

The fraudulent loans for 2023 amount to over £500m, bringing total losses for the year to £1.2bn, up from £648m.

A Department for Business and Trade spokesperson said: “These figures do not represent an increase in the overall amount paid out, and instead are a result of lenders reclassifying existing payouts following their extensive work to tackle fraud in the schemes.”

HMRC’s annual report from 2021/22 said 2.5% of the £19.7bn delivered through self-employed support had been lost to fraud, and the Treasury said it expected to write off £4.3bn of the £5.8bn of public money fraudulently claimed by businesses during the pandemic. According to Insolvency Service data, 1,431 company directors have been disqualified due to suspected fraud involving pandemic-related financial support.