More than 200,000 tax scams reported to HMRC last year

Self-employed taxpayers more likely to be targeted by scammers, following self-assessment deadline

HMRC has issued a warning to millions of taxpayers to be on the lookout for tax scams, with more than 200,000 scams reported to the tax authority in the 12 months from January 2023 to January 2024.

A total of 207,800 reports – up by 14% from the previous year – raises questions about HMRC’s enforcement activity, with the tax office apparently unable to tackle illegal operators and tax scams.

The majority of the scams reported in the previous 12 months were “bogus tax refund offers”, according to an HMRC press release. The tax authority also warned that “fraudsters could set their sights on self-assessment” taxpayers using similar tactics, with the deadline having recently passed.

If true, as many as 11.5m taxpayers could be at risk of targeting by scammers.

Increase in scams mirrors rise in tax avoidance schemes

Warning taxpayers to be vigilant, HMRC’s Chief Security Officer, Kelly Paterson, elaborated on the tactics scammers are currently using.

“With the deadline for tax returns behind us, criminals will now try to trick people with fake offers of tax rebates”, she said.

“Scammers will attempt to dupe people by email, phone or texts that mimic government messages to make them appear authentic. Don’t rush into anything, take your time and check HMRC scams advice on GOV.UK”, Paterson added.

Alongside the 14% increase in reported tax scams, there has been a 29% increase in “malicious web pages”, to 26,443. These websites attempt to trick users into submitting genuine information which can then be used by scammers.

The proliferation of tax scams and tax avoidance schemes over the last year has coincided with economic challenges. One tax and self-employment expert fears that these conditions mean the self-employed are at greater risk of falling victim to these schemes and scams.

Greater tax protections needed for self-employed

Speaking ahead of last year’s Autumn Statement, Julia Kermode – former CEO of the Freelancer & Contractor Services Association (FCSA) – highlighted the need for government regulation to protect self-employed workers from tax avoidance schemes and scams.

This included the umbrella industry. “Distorted” as a result of IR35 reform, the industry has attracted “more unscrupulous providers” whose operations are, in fact, tax avoidance schemes.

While Kermode said that “a lack of regulation in the sector has long been an issue”, it has become more acute since IR35 reform. With recent cost-of-living pressures, false promises of high take-home pay and tax refunds are likely to attract self-employed workers in need of extra cash.

But stamping out tax avoidance schemes and tax-related scams “won’t be an overnight process”, Kermode admitted. Nonetheless, she called for “a robust regulatory framework” to protect self-employed workers and taxpayers from tax avoidance schemes and related tax scams – and “greater deterrents” for scammers and schemers.

Taxpayers can help HMRC tackle tax scams, including phishing and other suspicious communications, by reporting these via the appropriate channel: