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How your clients can protect themselves as fraudsters target UK taxpayers

5th Dec 2022
Brought to you by
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Xero is an easy-to-use platform for businesses and advisors.

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HMRC has warned that taxpayers are being targeted by fraudsters. Here’s how your clients can remain mindful of scams, and keep their personal information safe. 

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Xero

The holiday season is truly upon us, which means many of you will be looking ahead to beyond the festivities and gearing up for tax season. We know it can be an extremely stressful time for you and your clients, and this year may pose new challenges, with Making Tax Digital (MTD) for VAT fully underway for the first time. 

While this and next year’s MTD for Income Tax Self Assessment (ITSA) will result in greater efficiencies and less onerous admin for small business, landlord and sole trader clients in the long term, it’s natural to feel a sense of trepidation over such significant changes. 

That said, something more sinister may be afoot, with HMRC warning that fraudsters are increasingly targeting taxpayers in a bid to get hold of personal information or bank details. 

Your clients may feel even more stressed with this threat looming large, so we’ve shared some tips for staying safe this tax season.  

A challenging time

HMRC reported that between September 2021 and August 2022, they responded to more than 180,000 referrals of suspicious activity from taxpayers. Of these, almost 81,000 related to scams offering fake tax rebates. There is a very real threat to your clients. 

There are a number of ways fraudsters target taxpayers. One, is automated telephone messages, claiming the recipient has underpaid National Insurance and demanding they pay over the phone or face a criminal conviction. Another approach has been emails claiming to be HMRC, asking would-be victims to click a link to enter bank details to get a tax rebate. 

If you’re lucky enough to have a background in tax advisory, these scenarios will set off alarm bells. But others won’t have this information and are vulnerable to genuinely convincing schemes – those who are unrepresented, in particular, could assume they’re legitimate. 

At a time of soaring inflation and a cost-of-living crisis, it’s no surprise that the prospect of free money from HMRC would appeal, and many more may fall victim to these scams. 

Here’s how your clients can tell if they’re being targeted, and some advice you can share to protect them. 

Safety first

Clients should understand that HMRC would never call someone threatening arrest, so if they get a call to the contrary, they should know all is not what it seems. In truth, if a client receives contact from anyone claiming to be from HMRC, via any channel, they should check this advice on gov.uk before taking any further action. 

If a client does suspect they are being targeted, they should report suspicious activity to HMRC by forwarding text messages to 60599 and emails to [email protected]. This online form can be used to report any phone calls they may have received. 

And sadly, it’s best to bear in mind that if it sounds too good to be true, it almost certainly is. If they receive any correspondence from HMRC saying they are due a rebate or face criminal action if they don’t act, they should stop and contact HMRC directly to ensure all is above board. 

Keeping safe

There are other steps that can be taken by clients to keep their information safe. Multi-Factor Authentication or verification apps, for example, can build in additional levels of security. In addition, taxpayers should always apply software updates on devices as soon as they become available. 

Perhaps most obviously – though many people don’t follow this rule of thumb – they should never use the same password for different websites. 

Last but not least, they should never share login information with anyone. Exercise caution, regardless of how trustworthy the person may seem. By sharing these points with clients, they should avoid being caught out by fraudsters this tax season.

To learn more about MTD for VAT, head to Xero’s hubs for small businesses and accountants. If you want to find out more about MTD for ITSA, check out these resources to get you up to speed. 

By Stuart Miller, Head of Industry Engagement, Xero

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