How to Spot a Tax Scam
HMRC tax scams are usually in the form of a phone call, text message or email. You’ll rarely be sent a fraudulent letter from HMRC.
Calls
HMRC will never call to request immediate payment without having sent formal paperwork first, like to your home address. However, they may call to follow up about an outstanding payment.
You’ll know if the call is genuine if the caller can provide your unique taxpayer reference number. Be wary if they provide this, but also insist you make an immediate payment. The scammer could simply have access to your reference number.
An HMRC rep will never ask for immediate payment on the phone without providing alternative options or a timeframe for when payment can be made.
If you’re unsure if it is HMRC you are speaking to, hang up the phone and call HMRC directly using the official number on the HMRC website. Don’t call the same number back or call a number given to you by the person that called.
Texts
A scam text message from HMRC will usually state that you have to pay a fine or claim a rebate. These texts could even say a tax return is due. The sender may be named “HMRC”, but this can be fraudulent and is a tactic used by scammers to gain trust.
A link will usually be provided in the message. Never click on the link. It could download a virus to your phone which harvests your personal information (including bank details).
Typically, the link won’t install malware and is only designed to get you to enter your bank details to “pay the fine” or “claim the rebate”. However, it’s best to delete the message anyway and refrain from clicking any links.
Emails
The easiest way to spot a bogus email is the address; addresses often contain recognisable keywords such as ‘gov,’ ‘no reply’ or ‘hmrc’ to feign legitimacy but are not used by HMRC proper. If the sender’s address differs even slightly from a trusted organisation, it is likely fake.
A sense of urgency is also favoured in phishing scams. Penalties and threats are common tactics to pressure an individual into giving away crucial information. Typos are also big indicators of authenticity. In sum, if the tone of the email does not mirror the style of correspondence commonplace in government documents, it could be a scam.
Always remember, HMRC never asks for personal details or requests payment concerning tax rebates over an email. If you suspect the email may not be genuine, take care not to open any attachments or click any links. These will lead you to a phishing site; these are designed to install a virus onto your computer or mine your personal data.
Postal
Phishing scams aren’t just relegated to the internet – traditional print letters are another form of fake correspondence. Because HMRC does ask for payment via letter, they are a popular scam.
If the letter asks for bank details, you can be sure that it is fake. HMRC keeps a bank of personal information in its database. Even more inappropriate is asking an individual to open a new account in the event of data loss.
It’s best to remember that while payment is requested via mail, immediate payment rarely is. When immediate payment is requested, there will be other ways to discuss the account further in a legitimate letter. If you are concerned about the validity of addresses, bank details, or numbers used, check the official gov site.
Here is an example of a recent postal scam that was sent to one of our contacts. The only thing that stopped them from taking further action was speaking to their bookkeeper first to check before paying it.
Seek professional help
HMRC scams target anyone, but self-employed workers and small businesses can be a primary target. Because official emails, texts or call alerts when tax returns are due are common, it can be hard to spot whether it’s really HMRC or a scammer.
The best way to protect yourself against HMRC scams is to understand how they work and what to look for. Seek professional help where needed and always call HMRC back directly (via the official website number) if you suspect a scam.
At Hugh Davies Accountancy and Business Advisory Firm, we provide professional, up-to-date knowledge and practice advice to small and large businesses.
Contact our team today for a discussion about how we can help your business with tax returns, accountancy, and protection against scams.