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Concerns raised over VAT fraud scheme

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Businesses have been warned to check the accuracy of their VAT details in their business tax account amid heightened unease over potential fraud.

1st May 2024
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Fraudsters are using a VAT form to defraud businesses of their repayments HMRC has admitted.

Firms are able to update their VAT details with HMRC online or using paper form VAT484, with the data required including their contact information, return dates and bank details.

HMRC has confirmed it is working on an issue whereby form VAT484 can be submitted with the legitimate bank details changed to that of the fraudsters, with any subsequent repayments then released into that new account.

“We are taking action on the small number of cases where paper bank variation forms have been fraudulently used in an attempt to gain access to VAT repayments,” HMRC said in a statement.

“We’re putting measures in place to stop this from happening, while asking businesses to remain vigilant.”

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Replies (22)

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By Paul Crowley
01st May 2024 12:17

This needs numbers.
Paper is now so rare that HMRC really should be looking to confirm that it is genuine.
This is not a scheme. It is something that would be very easy for both employees and outsiders to achieve.
No point though unless a refund is known to be forthcoming, and would be identified if payments are by direct debit.

HMRC are once again looking to put the taking care onto taxpayers, rather than look to have communication on suspicious paper forms.

Thanks (5)
Replying to Paul Crowley:
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By FactChecker
01st May 2024 19:02

And not just HMRC ...

Saltmarsh (ICAEW) also warned that businesses should “regularly check their bank account when they are expecting a VAT repayment from HMRC so that any suspected fraud can be reported as soon as possible”.

Given how many posts there are on Any Answers about missing/late repayments ... how is anyone meant to know '*when* to expect a VAT repayment' and thus 'report the suspected fraud as soon as possible'?

Anyway, as Paul says, HMRC created the broken system so it should be them that mends it ... not just yet another pile of steaming admin to ladle over the taxpayer!

Thanks (6)
Replying to FactChecker:
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By sodge2000
10th May 2024 10:33

In our case HMRC have a bank account register for our business. If an amount of a VAT payment is due it is taken from that account. If we are due a VAT repayment we are sent a Cheque which then needs processing by our bank. WHY?

Thanks (0)
the sea otter
By memyself-eye
01st May 2024 14:36

My son's business is expecting a VAT payment this month (seasonal trade, a lot of expenditure Jan-March, no income)
If HMRC pay it to a N'er do well instead, who loses out?

Thanks (2)
Stepurhan
By stepurhan
01st May 2024 14:49

So just to be clear, HMRC has been accepting changes of bank details without security checks to date. Their immediate response is to not even to change their letters to highlight bank details have been changed, but to put the onus on businesses to check after the fact. Possibly even after a refund has already been redirected depending on timing.

Providing a bit more detail on what "putting measures in place" means in this context would be the bare minimum HMRC should do in the circumstances.

Thanks (8)
Ivor Windybottom
By Ivor Windybottom
01st May 2024 14:55

For most businesses the rules require refunds to be made to the source (e.g. same bank account or same card account). This obviously helps reduce money laundering opportunities and fraud. HMRC should be made to follow a similar process and only redirect refunds where a full check has been made.

Thanks (0)
Replying to Ivor Windybottom:
the sea otter
By memyself-eye
01st May 2024 15:07

The words 'HMRC' and 'should be made to...' don't belong in the same sentence.

Thanks (0)
Replying to memyself-eye:
Ivor Windybottom
By Ivor Windybottom
01st May 2024 15:45

How difficult is it to look up the business contact details and give them a little tinkle to ask if they meant to change the details? A 5 minute call (as businesses can't keep you waiting for 1 hour!!) and all done.

I do wonder if HMRC's heart is really it in anymore. It feels like the Revenue's work output is similar to someone coasting gently to retirement, having lost interest in the job.

Thanks (6)
Replying to Ivor Windybottom:
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By Open all hours
02nd May 2024 05:34

Feels like the Bob Monkhouse joke about his father. ‘ He was a bus driver. I would like to die the same way my old dad died. Quietly and peacefully in his sleep, not screaming and wailing in terror like his passengers.’
For far too long Jim Harra has been taking us for a ride.

Thanks (8)
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By johnjenkins
02nd May 2024 10:25

How long before some bright spark scams CIS refunds?

Thanks (2)
Replying to johnjenkins:
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By Paul Crowley
02nd May 2024 11:01

That has been going on for ages.
HMRC now request ID sent in post to a special address if they have doubts.
The scammers do not interrupt a normal repayment, they submit a fictional return with bank details of their own.

Thanks (1)
Replying to Paul Crowley:
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By johnjenkins
02nd May 2024 11:16

Must admit not heard of that one. In the many years I have been trading I've never had any CIS problems (apart from Ltd Co's).

Thanks (0)
Replying to johnjenkins:
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By Paul Crowley
02nd May 2024 22:12

The ID thing is fairly recent. I have not yet had a client need to do it, but a former client that DIY'd her return had the letter (copied to me as HMRC still had me listed as agent).
Not a brilliant idea as the address was used exclusively for ID documents, in paper.
One client, maybe 15 years ago had his UTR stolen and defrauded. He lost no money and HMRC refused to give any details to anyone about it. That was the year before he appointed me.

Thanks (0)
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By RichyC
02nd May 2024 10:28

HMRC watch out for the horse when it's already bolted, absolute disgrace!

Thanks (0)
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By Stoker
02nd May 2024 10:41

It's no better online. My online business a/c said "your email is not working" along with a link saying "Fix it". As my email seemed to be working as expected, I clicked "Fix it" to see more details but was rewarded with a new form saying "you have asked to change your email address" now wait for us to send you a letter in 15 days.

Dealing with HMRC is like some horrible psychological experiment run amok.

Thanks (3)
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By anthony charles taylor
02nd May 2024 11:01

Ia there. Any scam that the naive HMRC, land registry or Treasury has not been party to? The more involved the easier it appears to be, sadly.
Surely these fiddles would stand out like a sore thumb to the average accountant, but sadly the civil service seems to have neither competence nor intellegence these days... saaaad innit

Thanks (2)
Replying to anthony charles taylor:
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By Springfield
02nd May 2024 11:50

It's not just competence or intelligence, it's a complete disregard for any kind of care or control over anyone else's money - whether it belongs to the government, businesses or members of the public. It would seem that civil service responsibility for money begins and ends with their own salary, expenses and pensions.

See covid support schemes, VAT carousel fraud etc, etc.

Thanks (0)
@enanen
By enanen
02nd May 2024 11:12

HMRC not undertaking proper checks

Thanks (0)
Replying to enanen:
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By rememberscarborough
07th May 2024 15:34

Just seen that PwC & EY have been fined heavily for another failed audit. Wonder if the FRC would care to take a look at HMRC's audit procedures and issue appropriate penalties for any "failings"....

Thanks (0)
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By morganedge
04th May 2024 18:41

To boil it all down, HMRC has identified a potential fraud and is taking action to stop it.

Thanks (0)
Replying to morganedge:
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By Paul Crowley
04th May 2024 22:12

Nah
HMRC have been defrauded and want all taxpayers to try to fix it so that it happens less often.

Thanks (3)
Replying to morganedge:
Stepurhan
By stepurhan
08th May 2024 08:55

They say they are "putting measures" in place, but there is no information on what those measures are. That being the case, I would boil it down to HMRC has identified a potential fraud, but is expecting taxpayers to take action to stop it.

Thanks (1)