The UK government has issued a final 48-hour warning to businesses and sole traders who wrongly claimed financial support during the Covid-19 pandemic.
Deadline Looms for Voluntary Repayment
Chancellor Rachel Reeves has stated that those who took Covid cash they did not need or were not entitled to must 'put it right now'. The window for the Voluntary Repayment Scheme will slam shut at 11:59pm on December 31, 2025.
After this deadline, the government has warned it will begin enforcement action to recover the funds. This could involve the money being taken directly, with some cases also attracting interest charges or financial penalties.
Consequences for Non-Repayment
Where deliberate fraud or abuse is suspected, cases will be investigated by a new specialist fraud team in early 2026. These investigations could lead to civil recovery or criminal prosecution.
The scale of potential misuse is significant. Since a dedicated hotline was launched in September, there have been 300 allegations of Covid-related fraud, with a total value of £35 million.
Chancellor Reeves emphasised the public cost of the funds, stating: “This money belongs to your local community – our NHS, our schools and our vital public services. Those who took tax-payer-funded help they weren’t entitled to and who fail to come forward will face the consequences.”
Which Support Schemes Are Affected?
The repayment initiative applies to a range of pandemic business support programmes. Firms are urged to check if they claimed more than they should have from:
- Coronavirus Job Retention Scheme (CJRS)
- Self Employed Income Support Scheme (SEISS)
- Eat Out to Help Out Scheme
- Cultural Recovery Fund
- Various business support grants
- COVID-19 Business Loan Guarantee Schemes, including Bounce Back Loans
Help for Those Struggling to Repay
The government acknowledges that some businesses may find repayment difficult. Those with loans are advised to contact their lender immediately to discuss 'Pay As You Grow' options, which can include:
- Extending the loan term.
- Making interest-only payments for a period.
- Taking a repayment holiday.
Even businesses that have already defaulted and received a formal demand may still be able to agree on a new repayment plan. For impartial advice, the free Business Debtline is available on 0800 197 6026.
Businesses and sole traders must act via the official government webpage before the year-end deadline to avoid escalating action in the new year.
