How Your Clients Can Avoid HMRC Scams During Tax Season

8th Jan 2021
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HMRC scams are as old as the hills, but during the busy January tax season they’re particularly active. Find out more.

Don’t let your clients fall into the trap

Scams occur throughout the year but during certain points in the calendar (like tax return time) they pop up even more than usual.

Scammers use a range of mediums including emails, phone calls, texts and even letters to get in touch with unsuspecting people and businesses. Typically seeking out personal details or asking victims to make fraudulent payments, things can soon turn nasty. Indeed it’s not uncommon for victims to be threatened with legal action, arrest warrants or even prison due to “unpaid tax”.

With the busy January tax period in full swing, now is perfect time to familiarise yourself with these scams so you can help protect your clients.

Three main types of HMRC scam

HMRC scams come in all shapes and sizes, and are constantly evolving. However, most of them tend to fall into one of three types:

Tax rebate or refund scams

This is a really common one. Scammers get in touch with their victims telling them they’re due a tax rebate. And with many people suffering financially at the moment, sadly it’s easy pickings.

Victims are asked to provide their bank details so that the “overpayment” can be repaid. Often additional personal details are extracted, such as their address, mother’s maiden name, passwords and bank details. Of course, no such tax rebate exists; scammers are simply looking for the information required to clear out innocent peoples’ bank accounts. Furthermore, personal details are often sold on to criminal gangs.

Don’t let your clients fall for it. The fact is HMRC will never ask for bank account details via email or text - make sure your clients know this.

Tax scam text messages

Another very common one.

Scammers posing as HMRC representatives use number spoofing to make a victim’s phone display ‘HMRC’ as the sender, rather than a phone number. This makes them frighteningly convincing.

Generally, scammers will trying to convince the victim that they’re owed a tax refund (again looking for personal and banking details). Often they’ll frighten the victim by saying they owe HMRC large sums of money.

Text messages usually contain a link to a website which will harvest the victim’s personal information. Sometimes these links also spread malware which can lead to theft of money or the victim’s identity.

If your client receives a text message purporting to be from HMRC offering a ‘tax refund’ in exchange for financial or personal details, they should not act on it. And they certainly shouldn’t click any links.

Tax email phishing scams

Tax email phishing scams work because they look incredibly authentic. They appear to have been sent from official government email addresses, with thousands of people being conned each year. Often, emails will be finished off with a genuine looking signature supposedly of an HMRC official. Many show some kind of stamp mark on them too.

Tax email phishing scams by their very nature are more common around tax return time. The aim of these emails is to persuade victims to send money, or to steal it from their bank account. They also seek to uncover personal information, again to pass on to organised criminals.

If any of your clients think they’ve received a suspicious ‘HMRC’ email, it’s worth pointing them in the direction of HMRC's phishing email guide. This contains up-to-date information about how to recognise a scam email from a genuine one, and what they should do next.

Red flags

The above are main types of scam. But within these, there are many red flags to look out for.

1. Receiving a suspect phone call

This is where a scammer will phone a victim before trying to extract personal information. If the caller’s identity cannot be ascertained, then they should hang up and immediately call one of HMRC’s call centre numbers. If the call is indeed genuine, an HMRC call handler will be able to advise your client.

2. Being contacted out of the blue

Sometimes HMRC will call an individual out of the blue, so this red flag isn’t always easy to spot. Again, it’s a common one around tax season so make sure your clients are aware of how to check.

The first thing is to verify the identity of the caller. This can be done by asking them some questions that, if genuine, they should know the answer to. These would be things like what is my UTR number? Or, what is my date of birth? If there is any doubt they should play safe and hang up. If it’s genuine after all, HMRC will usually follow it up.

3. The use of threatening language

Clearly HMRC officials would never use threatening language or try to pressurise people into acting quickly. If this is the case it’s highly likely to be a scam, designed to catch people on the hop with no time to think things through. A big red flag indeed.

What should my client do if they receive a spam message allegedly from HMRC?

If any of your clients receive any kind of scam communication allegedly from HMRC, they should follow the instructions given on the government’s Report suspicious HMRC emails, text messages and phone calls page. They should never act on them - it’s better to be safe than sorry.

HMRC scams aren’t just limited to tax season

Of course, many of these scams are as old as the hills and will often rear their ugly heads in cycles. Wherever there’s money to be made, by way of tax rebates or grant funding opportunities, you can guarantee some scammer or other will latch on to it.

At Myriad Associates we’ve worked for two decades solely in the area of research and development (R&D) tax relief and funding. Having seen a fair few scams ourselves in that time, we can certainly offer advice as to what to look out for. Plus, if any of your clients have undertaken any innovative projects lately (designing or revamping a product or service for example) then we can also partner with you to help them claim valuable R&D Tax Credits.

Contact us

If you would like to raise anything we’ve discussed in this article, including R&D Credits and further R&D funding, please do contact our expert team. We’re working remotely as usual during the pandemic and are here to help.