Arrests made by HMRC in tax repayment frauds

This case highlights the dangers of responding to emails (phishing schemes) and social media appeals promising tax rebates and otherwise ways of receiving large pay outs in return for information.

Four men were arrested in a coordinated operation across England by over 50 officers from the HM Revenue and Customs’ (HMRC) Fraud Investigation Service. The team simultaneously executed warrants in Harrogate, Torquay, London and Kent last week.

Large scale fraud

HMRC had identified a large-scale operation by the online fraudsters in a tax repayment scam. After a prolonged investigation the raids took place and 4 residential properties were searched. Valuable evidence was obtained: more than 20 mobile phones were appropriated, plus several computers and tablets.

HMRC is aware that criminals are attempting to obtain customers’ Government Gateway logins and other personal details, enabling them to register for Income Tax Self Assessment and submit bogus tax refund claims before pocketing the repayment.

Individuals, ranging from teenagers to pensioners, are being targeted on social media platforms by fraudsters seeking to ‘borrow’ their identities. In return, the individual is promised a cut of the tax refund ‘risk-free’.

Handing over sensitive personal information to criminals like this, even inadvertently, risks individuals involving themselves in tax fraud, and having to pay back the full value of the fraudulent claim.

Customers should therefore only deal with HMRC directly or through their tax advisor in relation to their Self Assessment tax refunds.

The investigation was carried out over a period of time when reports led to suspicions that fraud and money laundering was taking place. The perpetrators were using taxpayers’ stolen identities to commit Self Assessment and VAT repayment fraud against HMRC. It is understood that taxpayers were contacted online via social media and enticed initially to to take part.

Advice offered by HMRC

HMRC offered warning to taxpayers that they could inadvertently become involved in fraud schemes such as this by responding to temping offers coming up on emails and social media:

Peter Vivian, Assistant Director, Fraud Investigation Service, HMRC, says:

“We urge everyone not to share personal details such as bank account details, Government Gateway login credentials or National Insurance numbers.

“Your details may be used to obtain fraudulent tax repayments from HMRC and this could leave a debt associated to your tax record which you could be required to repay to HMRC.

“If your bank believes your account has been used to facilitate fraud, it could be closed without notice – making it difficult to open new bank accounts or obtain credit.

“Fraudsters routinely share hijacked identities with other criminals to commit further fraud and it may consequently be hard to regain control of your identity details.

“We believe this to be a calculated criminal attack against HMRC using hijacked personal information obtained from innocent members of the public.

“If something looks too good to be true, then it almost certainly is,” HMRC says.

You should never respond if someone approaches you, either online or in person, offering money in return for you lodging your personal details with them. Be very wary about providing personal details unless you are dealing with someone you know and trust or it’s a legitimate organisation you are dealing with.

Details of the arrests: A 24-years old man from Beckenham, a 30-year-old man from Harrogate, 28-year-old man from Torquay and a 25-year-old man from London, all arrested for fraud by false representation and money laundering.

A spokesperson says: HMRC is responsible for making sure that the money is available to fund the UK’s public services and for helping families and individuals with targeted financial support.

HMRC investigations

HMRC conducts a wide range of investigations, some random, some targeted, into taxpayers’ affairs, from simple checks all the way though to a HMRC fraud investigation. The most serious HMRC tax investigations are normally conducted by The HMRC Fraud Investigation Service. These types of investigations can take a very long time to come to conclusion, they can be expensive and cause the taxpayers involved a significant amount of stress.

Coming under investigated by HMRC is therefore a difficult and costly process. Getting the right help during such a tax investigation, most likely from your accountant, can make the process a lot smoother, and also it may reduce the overall financial costs, in the long run.