KPMG: Public purse raided as UK hit by record fraud levels

In 2010, the UK fell victim to more fraud cases than ever before, with the Government bearing the brunt of the attack - the KPMG Fraud Barometer reveals today.

In fact, 42 per cent of all cases were levelled at the public purse, totalling £571m. This was an increase of nearly 20 per cent, from 59 instances in 2009 to 70 in 2010.

One of the largest cases was worth £103m, in which a 48-year-old man claimed a flood of fraudulent bids for tax breaks on research into green technologies.

Hitesh Patel, KPMG forensic partner, said: "Government agencies, like commercial businesses, have been increasingly vulnerable to the threat of fraud. In a year of austerity measures implemented by Government, tax increases, the threat of rising unemployment, and significant structural change it is hardly surprising that the long fingers of the fraudster have reached into the public purse.”

What other observations/input do you have?

Also, with regards to HMRC-related scams, have you heard anything about the “Green R&D research” tax credit frauds, or any updates on false tax repayment claims?

Comments
davidwinch's picture

KPMG figures

davidwinch | | Permalink

It should perhaps be remembered that the KPMG figures refer only to major frauds coming to court.

The frauds referred to by KPMG each (allegedly) involved sums of £100,000 or more.  In terms of the total number of frauds prosecuted these are a small minority.  And it is generally believed that the number of frauds, of any size, which come to court are a small minority of the frauds perpetrated.

Nevertheless the figures and the picture that emerges make interesting reading.

David

www.AccountingEvidence.com

Just the tip of the Iceberg can be seen.

The Black Knight | | Permalink

Unfortunately when you create a system based on self assesment with huge penalties but no enforcement what do you expect.

I do not think there has been an increase in fraud just because of hard times, only that it is perhaps more noticable.

cymraeg_draig's picture

Fraud & Fiddling

cymraeg_draig | | Permalink

It depends what you call "fraud" and what you call "fiddling".

Certainly there is a public perception that the government is a legitimate target - no doubt fuelled by MPs expenses fiddling which has removed any respect the public ever had for government.

I am certain that "fiddling" has increased and that the so called black economy is more active than ever. Walk down any street and you will see plumbers, builders, etc all working and asking for "cash".  I have little doubt that many of these are drawing unemployment benefits, or, at the very least suppressing their earnings to avoid tax & VAT, and to maximise their WFTC claims.

I think there is a vast difference with this, which for convenience I refer to as "fiddling", and what might be called "real fraud" where criminal gangs set out to defraud the state of millions.

 

thats a Fiddling fraud then!

The Black Knight | | Permalink

The criminal gangs attcking the system would best be decribed as making an unauthorised withdrawal from the bank of government, just in the same way as a masked shotgun loaded 1970's crim. lol

Unfortunately the little £5k's add up as well, and I am the poor one paying for it. Still I suppose what ever is given will be wasted anyway so I am really not sure where the moral ground lies anymore.

cymraeg_draig's picture

The difference

cymraeg_draig | | Permalink

I'm using the term "fiddling" to differentiate between the individual defrauding the state of hundreds, as opposed to organised crime using sophisticated schemes to net possibbly millions.

millions

oldersimon | | Permalink

I thought the only ones who got milions from the state were the big 4 for "consultancy" 

My AWeb subscription update said "Public purse raided as UK hit

chatman | | Permalink

Quite impressive for a single person.

cymraeg_draig's picture

MLR

cymraeg_draig | | Permalink

My AWeb subscription update said "Public purse raided as UK hit by record fraud levels by robertlovell" 

Posted by chatman on Mon, 10/01/2011 - 18:51

 

Assuming this "information" came to your attention in the course of your work - should you be sending a money laundering report ?  Clearly this update MUST have made you "suspicious" :)

 

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