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In recent weeks, HMRC audit activity regarding compliance with the 'Eat Out to Help Out' (EOTHO) scheme has been on the rise. Introduced as part of the Government's economic stimulus in response to COVID-19, EOTHO ran from 3 to 31 August 2020 and allowed diners to enjoy 50% off eat-in meals and non-alcoholic drinks between Monday and Wednesday each week. 

Guidance in relation to the scheme was published very shortly before it went live, meaning many businesses had little time to implement complex system changes, consider tax reporting and provide adequate staff training.

More than 78,000 outlets participated in EOTHO during the summer and HMRC had initially anticipated that this scheme would have cost approximately £500m, but the eventual claim figure was £840m.

HMRC has now started an information gathering and review process on the compliance of the scheme to ensure that claims made were accurate. HMRC has initially contacted 4,000 claimants, with selected businesses being required to attend a virtual meeting and/or telephone interview as a first step. It is really important that businesses are able to evidence appropriate governance and processes backing up the claims made given the volume of activity.

In the event of any identified overclaims, the potential impact includes: