Using a high volume tax claims company to obtain a tax refund is not illegal, but taxpayers can get into deep trouble when the claims company makes a false claim on their behalf.
In the latest scam the refund company asks the taxpayer to register for self assessment to claim employment expenses. The company then uses the individual’s Government Gateway login credentials to prepare and submit a tax return containing a claim for Enterprise Investment Scheme (EIS) relief!
This will generate a large refund which is paid to the refund company, with a small percentage passed to the taxpayer. When HMRC investigate they demand all of the EIS tax relief back from the taxpayer, who never received the money.
We warn our clients to never hand over Government Gateway credentials.
We also warn our clients about HMRC impersonation scams as these tend to increase in the lead up to the tax return filing deadline.
The fraudster will ring or text a mobile number saying they are from HMRC and the taxpayer must pay an amount of tax immediately. Some fraudsters even pretend to be HMRC on a WhatsApp message!
HMRC will never ask for personal information or payment information by phone, email, or text message. HMRC’s advice is to not be rushed into anything, end the call and forward any text message to 60599 (local rates).
HMRC will never threaten arrest, or offer a tax rebate by phone or email. If the taxpayer has been threatened report the call online.
Written by the Tax Advice Network