More than 84,700 hospitality firms took part in the government’s Eat Out To Help Out (EOTHO) scheme, that offered diners a 50 per cent discount on food orders above £10 on Mondays to Wednesdays during August and October last year, according to figures released by the Treasury.

Big Hospitality reports that HM Revenue & Customs has begun post-payment compliance checks on participating establishments to recover money that may have been paid out incorrectly. The figures from the Treasury state that there were 130,000 claims for the scheme as hospitality companies took advantage, with an overall cost of £522 million.

HMRC said that it had worked quickly to pay restaurants within five working days of receiving EOTHO claims. Controls were built into to address potential fraud, which included limiting eligibility to food businesses registered with the relevant local authority by 7 July.

The taxman is now in the prices of contacting 4,000 hospitality businesses, as records suggest there could be incorrect claims. Those contacted will have 60 days to respond to the letter from HMRC or possibly face formal compliance checks. This may include having to pay statutory interest and penalties.

The letter tells recipients they have been selected for consideration because they may have claimed for more EOTHO payments than they were entitled to, based on the information HMRC holds about the business, the amounts claimed and the data about the payments have received by credit and debit card.

Claimants will be asked to provide evidence of eligibility and their EOTHO calculations. Any business that voluntarily repays any overpaid EOTHO payments will not be charged any fines or penalties for the error.

Businesses that have made incorrect claims will need to complete an online disclosure form and HMRC will calculate the amount owed.

The letter concludes: “We are supporting our customers while tackling serious fraud and criminal attacks. We understand mistakes happen, particularly in these challenging times. This means we will not look for innocent errors and small mistakes for compliance action.”

If you need accountants, then contact us today.