HMRC has issued a press release, hoping to warn members of the public not to give access to their personal tax accounts to strangers who contact them online.
It appears that fraudsters are messaging individuals via social media, promising a “risk-free” tax refund. All the individual has to do is give up their government gateway and log-in details and the friendly fraudster will take care of the rest of the process.
A refund may be forthcoming but, as HMRC points out, the individual will be responsible for paying it back, plus potential penalties. The fraudster will have disappeared with a cut (one suspects a rather large cut) of the refund.
So why would anyone (apart from the fraudster obviously) get involved in a scam of this nature? As HMRC states, if something looks too good to be true, it probably is. But of course, that’s saying no more than if you think it might be a fraud, don’t get involved. Plainly, the people who are stung by this sort of scheme do not think they are getting involved in tax fraud; if they did, very few of them would go ahead. More likely, there is a combination here of general ignorance about the tax system, a tendency to believe what one sees on the Internet and some slick, professional-looking marketing material promoting the offer.
Ignorance of how the tax system works is endemic to the UK, because most people don’t ever have to engage with it. They go out to work and are paid a net sum, they don’t submit a tax return and HMRC and their employers deal with any tweaks via the tax code. Even the self-employed, who do have to make returns, have a very rudimentary understanding and tend to leave everything bar basic record-keeping to their tax agents. The loan charge saga (many people opted to join schemes whereby they were paid “tax-free” loans instead of taxable income) is not directly in point, because at the beginning of that course of events, it was uncertain whether the loans were indeed taxable, so knowledge of the system may not have been helpful. However, it was definitely another case of if it looks too good to be true … but that adage was in the end no help to the people caught up in the scheme.
This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit www.indicator-flm.co.uk or call 01233 653500.