Tax Refund Scams to Watch Out For
24th March 2021
We’re in the last weeks of the 2020/21 tax year now – and that’s prime hunting season for the tax refund scam merchants. Every year, thousands of people run the risk of handing the keys to their bank accounts and worse over to fraudsters. They know it’s the time of year when people are claiming their tax refunds, and they’re desperate to get their hands on your money and personal information.
Tax Refund Scams Increase Around The New Tax Year
When you claim a tax refund from HMRC, it’s important to remember that you’re not just grabbing some unexpected one-off windfall. This is your money you’re playing with, not HMRC’s. Your rebate claim is simply putting it back where it belongs. The tax scammers know you’ll be on the lookout for emails, texts and notifications about your upcoming refund claim. With about £300 million in overpaid tax waiting for UK workers in the trades to claim it back, that’s a really juicy target for the fraudsters.
Claiming tax back from HMRC can be a complex job, and a scammer will know that most people aren’t fully up-to-date on the rules and regulations. They might try to lure you into parting with cash or personal information by promising a huge or instant pay-out. On the other hand, they may try to put the frighteners on you with threats of fines or even prison time if you don’t hand over fistfuls of money in a hurry. Either way, it’s about pouring on the pressure to push you into making a bad decision.
Phone & Online Scams
Tax refund scams tend to break down into a couple of basic types. The first, and probably most common, version is the fake text, email or phone call. You’ll be contacted out of the blue by someone pretending to be HMRC, with either the promise of a quick pay-out or a demand for payment of a fine. If you’ve got your wits about you, you can often spot these without a lot of trouble. Here are the basic precautions you need to take to protect yourself:
- If you get a call from a number you don’t recognise, look it up online. There are lots of sites that list known spam numbers.
- You’ll never get a tax refund for travel and expenses without making an actual claim. Without that paperwork, HMRC won’t know how much you’ve spent or how much to repay. Being contacted by someone pretending otherwise is a massive red flag – especially if they’re asking you for your bank or ID details.
- HMRC will never ask you to give personal details or payment information by email. If you’re being told otherwise, you’re being targeted by a scammer.
- You never need to give card details for a refund to be paid to you. The only reason you ever need to give card details (especially the security number on the back and the expiry date) is if you’re making a payment, not if you’re receiving one. If they want your card details, they’re planning on cleaning you out.
Fraud and Complex Financial Scams
The other main type of scam can be a lot trickier to protect yourself against, since you’re already in the net by the time anything starts looking fishy. Sad to say, there are some seriously dodgy fake “tax companies” out there. They sometimes put a lot of effort into looking legit, but at heart they’re just there to steal from you when you sign up to them. Here’s how to stay safe:
- Never sign up with a company that tells you to claim for expenses you haven’t really had – whether that’s tools, vehicles or whatever. Cheating the taxman is a Very Bad Idea, and anyone who tries to convince you to over-claim is a thief.
- Always make sure you’re shown you a calculation of your refund before it goes to HMRC, so you know what’s being submitted in your name. No legitimate tax refund company will hide details of your claim from you.
- Make sure you get a copy of your tax return, for the same reason. You need to know exactly what’s being claimed in your name.
- Always check that the expenses being claimed for match your receipts. Did your adviser even ask for receipts? If not, you’re taking a massive risk by trusting them.
- Did the letter explaining the fee you'd be paying somehow never turn up? A real refund company will always be completely up-front about what you’re paying - and what you’re paying for.
- Does your adviser prefer a nod and a handshake over a written record of your arrangement? If so, cut and run because they absolutely do not have your best interests at heart.
One of the worst features of this kind of scam is the wreckage it leaves in its wake. HMRC has a lot of ways of detecting a fraudulent tax refund claim. When they do find something wrong, the actual criminal has often done a runner and is nowhere to be found. That leaves you, the real victim of the scam, stuck carrying the can.
How RIFT Tax Refunds Protects You From Scams
About 320,000 tradespeople in construction alone are due tax refunds each year, and only 30% of them ever get back what they’re owed. The scammers know all this, and they’re licking their lips at the thought of taking what’s yours. Here’s how RIFT Tax Refunds protects you and your cash:
- We act as your official “agent” with HMRC. This means we’re your safety net when you need to deal with the taxman. In practical terms, we handle all contact with HMRC for you, on the phone, in writing, via email and so on. You’ll never have to worry about whether you’re talking to the right person, if the phone line is real or if an email or letter really came from them.
- Sometimes HMRC will want to get in touch about a claim, to ask a question or to clarify something. We handle all that for our customers so there’s no chance of mistakes being made.
- We’ve been HMRC agents since 1999, so we’ve got a very good, direct relationship with HMRC. We have direct lines to call their specialists and we work very closely with them. We can even link up systems like Personal Tax Accounts with them so everything’s secure.
- When you give your information to us, you log in to your secure MyRIFT account. You never have to send or receive information through insecure means, so your details and cash stay safe at all times.
- All customers’ refunds are covered by our unique RIFT Guarantee. That means there’s never any danger of losing your money or having to give anything back to HMRC.
- If you’re a RIFT customer and you’re unsure about calls or messages you receive about your tax situation, you can contact us directly and we’ll check it out for you. If there’s a problem, we’ll fix it. If there’s a danger, we’ll protect you.
Keep on the lookout for dodgy tax companies, calls and messages. They’re all too easy to fall for if you’re not prepared and protected. Talk to RIFT about getting your cash back from HMRC. We’re the UK’s leading tax refund experts and your best defence against the scammers.