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Tax Return Fraud?

Tax Return Fraud?

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Client telephoned regarding his tax return which he prepares himself. He logged into SA system to find that tax return had been submitted and a tax repayment issued to a very odd bank account to which he is totally unconnected.

He telephoned HMRC who said they would investigate. He is expecting a call back in the next few days. They also suggested that he submitted his return as an amendment to existing details submitted.

I have suggested that he let us deal with this matter allthough we are currently not legged as agent for his personal affairs. I told him not to submit his tax return as an amendment to existing details HMRC hold due to the security concerns.

Client will come and see me once HMRC have rung him back.  I have some thoughts on how I should proceed in this case but would welcome your thoughts.

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By ACDWebb
31st Jan 2011 13:02

They haven't responded

to a phishing email purporting to be from HMRC have they?

I also seem to recall a thread on here with a similar query/scenario quoted.

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PJ
By paulgrca.net
31st Jan 2011 13:05

Tax Return Fraud

NO

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David Winch
By David Winch
31st Jan 2011 13:36

A couple of questions

How much was the repayment?  (Unlikely to be a fraud if only for a few pounds!)

Does your client have an unusual or foreign sounding name?  (There have been instances in certain ethnic groups of the identities of foreign nationals temporarily working in the UK being 'borrowed' by fraudsters - in the belief that these people were unlikely to submit a genuine self assessment income tax return and therefore the false return was less likely to be 'rumbled'.)

David

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PJ
By paulgrca.net
31st Jan 2011 13:45

Tax Return Fraud?

Tax repayment was £650 per client.

Client does not have an unusual or foreign sounding name. However the bank account to which repayment sent has a very stange name; client could not even pronounce it!

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Nichola Ross Martin
By Nichola Ross Martin
31st Jan 2011 14:41

Put it in writing to HMRC

and make a note of details and times and dates of all phone communications, you may need these at a later date, especially if there is any misunderstanding or tax penalties.

Virtual Tax Support for accountants, visit: www.rossmartin.co.uk

 

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By cymraeg_draig
31st Jan 2011 15:18

Evidence

From an evidential point of view - get him to take and save screen shots of every page on HMRC site - just in case it gets changed later.  There have been cases of HMRC staff being involved, so I'd advise him to do this asap.

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By bubbleblower
01st Feb 2011 13:00

HMRC Fraud

We had a similar problem about 13 months ago where hackers got into our firms HMRC site and amended returns of 22 clients to give repayments of between £4000 to £8000 and amending bank details. Clients were receiving repayment advices and when they didn't get the money they contacted the Helpline who were unaware of the fraud and when they contacted us we gave them the bad news. One hadn't paid tax for years but was expecting a £6000 refund. We were in constant touch with a special investigation department of HMRC for about 4 months and we weren't allowed to amend the returns until they gave us the ok. They didn't advise staff at HMRC incase it was an inside job so clients were ringing the helpline and being told you will get the refund and we were telling clients sorry but you will not, so don't book a holiday to the Bahamas on the strength of it. It was hassle at the time but eventually no client lost out

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By csmith8757
04th Feb 2011 11:32

HMRC Fraud

The same thing happened to our system some 15 months ago and affected 12 of our clients. With over 100k claimed in repayments.

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By mydoghasfleas
04th Feb 2011 11:41

How seriously does HMRC take fraud

I woncder if HMRC knows how to deal with fraud.

We submitted a client's 2009 return last year.  She was due refund of a littel over £2,000.00.

After non-receipt of the refund, the client contacted HMRC who denied her existence and her UTR. 

By now she had disappeared from the online records as well.  After calls to HMRC over several months, the best story we received was that the file was "locked".  We asked, "locked by whom?".  Response, "By HMRC".  Asked, "If you are HMRC then why do you not unlock?".  Promises were always made to return the calls but they never were.

We had client take it up with her MP.  HMRC took over six weeks to respond.

The story was that it had received inteliigence that account was used set up for fraud.  (It had been set up several years earlier was had paid amounts in far in excess of the refund).  As a consequence of the intelligence, the account was closed.  Further investigation on receipt of the MP's letter had revealed the intelligence was incorrect.

This was a nine month period from submission of the return.  The intelligence must have been received before the repayment was requested.  So information was held indicating fraud for nine months, HMRC did not contact the client nor did it contact us.  We had originally requested the UTR and prepared the returns for the client, so it was a fairly closed loop if there was fraud.  The absence of contact does not mean HMRC did nothing but the feeling I have is it did not, hence the title.

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By ThornyIssues
04th Feb 2011 12:42

The big question here is ......

..... how was access gained? I suspect (actually know) that the security aspects of the HMRC system is pretty robust so hacking is not a viable hypothesis. I would suspect inside jobs on this, given that a significant proportion of HMRC system development is done by a large multi-nat who uses off-shored labour.

£0.02  

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By Paul.Chillman
04th Feb 2011 12:51

Potential Tax Fraud

I have an ongoing case where my client's tax return was supposedly filed by him in August 2010.  This has supposedly triggered a refund of nearly £5,000 for the year, although his account at HMRC is also showing a credit balance of over £10,000.   We didn't submit the return and the client swears that he didn't either.  HMRC are still investigating through a special unit & have asked that we hold off sending the correct return until they give clearance.  

As to how someone got our client's sign-in details is still a mystery.

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By hclairesavage
06th Feb 2011 23:06

Happened to me ....CYA?....

.... this happened to me not so long ago as an agent.

I contacted the online services desk to report the issue and whilst on the phone they immediately reset my logon/passwords. I also made money laundering reports relating to the fraudulent repayment claims; and wrote separately to my clients' tax offices disowning the repayment claims. 

I think I covered myself and my clients. It took ages (three weeks?) for HMRC fraud department to contact me, they read me a standard script and told me to change my passwords!

Hope that helps. 

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