In September 2025 the Government launched the COVID-19 voluntary repayment scheme. This gave individuals and companies a final chance to repay funds they received from COVID support schemes that they were not entitled to without being asked questions.
This scheme ended on 31 December 2025 and HMRC have now moved from letting people voluntarily comply to enforcing and recovering payments.
HMRC’s next steps
HMRC are expected to increase compliance activity for COVID-19 support claims.
From 2026 onwards HMRC’s next steps are likely to include:
- Opening formal investigations into high-value high-risk or inconsistent claims.
- Checking data held by HMRC against information from other government departments.
- Sending targeted letters and requests for information.
- Using investigatory powers to look at claims and see if eligibility conditions were met.
- Working with other law enforcement bodies in joint investigations.
- Investigating civil and criminal fraud where there is evidence of deliberate behaviour.
The Consequences
Not complying can have consequences:
- Recovery actions – repayment of overclaimed amounts, plus interest and penalties.
- Director may be held responsible – HMRC may issue joint and several liability notices making directors responsible for amounts incorrectly claimed.
- Criminal investigations – if claims appear to be fraudulent HMRC may pursue criminal sanctions.
Unlike the voluntary repayment scheme there is no amnesty once an enquiry has started. Taxpayers can incur significant additional costs if matters escalate.
Why acting now still matters
Being proactive and contacting HMRC before they contact you can still make a difference.
Delaying action increases the risk of:
- Greater financial exposure through higher interest and penalties charged.
- Damage to reputation if enforcement actions become public.
- Personal exposure for directors where claims are found to be overstated or invalid.
In contrast, reviewing claims now and identifying issues to then engage with HMRC early can help contain risk and reduce the chance of investigations escalating.
How Menzies can support you
Menzies Tax Disputes and Disclosures team has experience working with HMRC and managing complex compliance and investigation matters. We can assist in reviewing past claims and, where appropriate, making a voluntary disclosure through the Digital Disclosure Service or Code of Practice 9 (used to protect taxpayers who have deliberately submitted fraudulent claims).
Contact us today to discuss your position confidentially.
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