This is an interesting point put forward by the ACCA’s head of taxation, Mr Roy-Chowdhury. He doesn’t mean that the system is too easy to hack, but that its complexity confuses taxpayers and makes them vulnerable to criminals.
He told the BBC, “The weakest link is the taxpayer. It is difficult to be too critical of the taxpayer and HMRC because many of the scammers are using the opaqueness of tax and our interactions or lack of with HMRC to steal the taxpayers’ money. Most people are scared of HMRC and regardless of how fully up to date their tax affairs are will always, because of the opaqueness of tax, give HMRC the benefit of the doubt and think they have underpaid.”
How are taxpayers being scammed?
Over the years there have been a variety of scams run by criminals pretending to be HMRC. It could be a fake phone call, voicemail, email or text. Usually they are either saying that you urgently owe HMRC money and that the police will soon be involved; or they say that HMRC owe you a tax rebate and they need your bank details to send you the money. The emails often contain links to phishing websites that steal your personal data, including financial details.
The scammers are clever and change the wording and target of their fraud regularly. The most recent new one is directed at students, telling them they are due a tax rebate. The number on the screen can be the real HMRC phoneline, without it being from HMRC. And the email headers, titles, logos and address can all be spoofed to look alarmingly authentic.
Do the intricacies of the tax system make it easier for criminals?
It is a fair point that the complexity of the tax system makes it less likely for us to understand what our tax position actually is. We all know that HMRC is a very serious, important government department and that they are cracking down on tax evasion and avoidance. The thought of actually being in debt to HMRC is frightening, so of course you’d want to pay any amount or fine as quickly as possible. Criminals take advantage of those emotions.
How can I know what’s really from HMRC?
You need to be proactive and suspicious. HMRC will only let you know about a tax rebate in the actual post. If you owe them money, you will also be informed by mail. There may be follow up phone conversations, but they will have very private details like your Unique Taxpayer Reference (UTR) number for verification.
You will not get into trouble if you tell a real HMRC representative that you are going to call them back in order to be vigilant. HMRC want all taxpayers to keep their money safe and regularly ask for websites to be shutdown and swiftly issue the public with information about new scams.
Take control of your cyber security
The more you know about your tax position, the safer you will feel. If you know that you aren’t owed a tax rebate, then you will confidently hang up on any potential scammer trying to tell you otherwise. Find out what your UTR is, check your tax code, look at how much tax you pay, find out if you are owed any tax reliefs and consult a tax expert for clarification on everything if you’re not sure.
Do not click on any suspicious links, open any texts, press call back or phone any numbers without checking. And when it comes to tax rebates, if it seems too good to be true, it probably is. The tax system is unlikely to change and it has to be complicated to include all potential tax positions. You don’t have to know about all of it, just the bits that affect you. When it comes to having good cyber security and avoiding fraudsters, knowledge really is power.