‘Eat Out to Help Out’ – HMRC begin compliance checks

Alexandra Docherty

Alexandra Docherty

Partner and Head of Private Client Tax

HMRC has begun to verify thousands of claims made under the Government’s ‘Eat Out to Help Out’ scheme earlier this year. Where HMRC’s records suggest that incorrect claims may have been made, businesses are being requested to check these and report any errors. 

Many businesses in Scotland benefited from the ‘Eat Out to Help Out’ scheme, which came into effect in August 2020. Introduced as part of Chancellor Rishi Sunak’s efforts to support the hospitality industry, the aim was to encourage the public to go out to restaurants by offering a 50% discount on eligible purchases throughout August.

Across the UK, over 84,700 hospitality businesses took part in the scheme which cost the Treasury £522m. Given the amount invested in the scheme, it is unsurprising that HMRC is now checking claims. 

HMRC has recently written to 4,000 businesses asking them to check their claims and report any errors within 60 days via an online disclosure form. If HMRC does not receive a response or is not satisfied by the reply, a formal compliance check may be launched to verify the claim, which could ultimately result in interest or penalties being due.

We understand that HMRC has selected businesses based on a variety of criteria, including:

  • Discrepancies between the information HMRC holds, including debit and credit card data, and the amounts claimed under ‘Eat Out to Help Out’;
  • Inconsistencies between different ‘Eat Out to Help Out claims’; and
  • The eligibility criteria for the scheme.

This emphasises how important it is to keep adequate records when making use of any of the Government’s coronavirus support schemes, including the Job Retention Scheme, so that you can demonstrate to HMRC that any claims made are correct.

If you have received a letter from HMRC regarding checking of claims, please contact your local Johnston Carmichael adviser to discuss how to proceed.