In January, this person picked up the phone to HM Revenue and Customs (HMRC). They were affected because they asked for a repayment of overpaid tax out of their self-assessment account. This seemingly innocuous phone call set into motion a series of events. One such fraudster was able to get away with stealing £2,500 from the taxpayer’s bank account. A staggering £47 million fraud spree was uncovered that gave scammers the ability to raid the tax records of almost 100,000 taxpayers. Nevertheless, HMRC has rejected any direct link between this occurrence and the bigger breach.
In June, HMRC announced a jaw-dropping £47m criminal theft. These scammers hacked into legitimate taxpayer accounts to file false repayment claims. This recent disclosure has sparked alarm throughout the tax and fintech industry regarding the safety of sensitive personal financial data managed by HMRC. After we filed the original request in January, the client’s tax account showed a credit for a period of five days. Sadly, the scammer took advantage of this window to pull the £2,500 causing a huge overdraft on the account.
The repercussions of the fraudulent activity were significant. The taxpayer continued to receive multiple letters from HMRC, each confirming an open balance of £2,500 plus accrued interest. In March, the law firm representing that impacted client notified HMRC of the breach. To their inquiries they received a rather cookie cutter holding response. The ensuing lack of urgency on the part of HMRC compounded the issue. It left the company and its clients vulnerable to an increased number of fraudulent claims.
To add one more-up, it’s also been revealed that 13 other clients of the firm are in the same pickle. HMRC has been in hot pursuit of every single one of these taxable clients for fraudulent repayment claims. Instead, countless impacted people are being subjected to a disheartening cycle of economic drain. The client tax account for the firm also showed a credit from the initial payment on account for the prior tax year. To make things even more complicated, … just wait.
Despite HMRC’s assurances regarding the integrity of its systems, the agency’s handling of this incident has prompted questions regarding its efficiency in addressing fraud claims. Taxpayer advocates have decried the practice of taxpayers receiving grim collections notices when they think they have already paid what they owe. The revelation has led to a further corrosion of faith in HMRC, especially as it continues to struggle with an overall security picture.