Organised criminal gangs have made an aggressive and unexpected attack on HM Revenue & Customs by filing bogus self-assessment returns and fraudulently claiming millions of pounds in repayments.

The revelations have forced the taxman to undertake a review of its self-assessment processing procedures as it attempts to fend off a new assault from organised criminals, who have already plundered billions of pounds from government coffers through tax credit scams and carousel fraud.

The department confirmed that it had brought in 'other agencies' to help it shore up its defences against the self-assessment fraud, prompting speculation that it was referring to the police and Serious Organised Crime Agency.

The frauds, which involve sending unsolicited SA returns to the taxman and claiming false repayments, were disclosed in the NAO’s report on HMRC’s accounts for 2006/07.

The report said that HMRC had discovered evidence of organised criminals making ‘systemic attacks’ on the self-assessment system. Such was the intensity of the frauds that in one case 50 purported tax agents were used to run a scam that involved 14,000 returns claiming £34m in false repayments.

Advisers were stunned by the fact that criminals had targeted self-assessment. ‘This is really bizarre. I had no idea that this was a problem. I would never have thought that this could be an area that would be vulnerable to fraud,’ said PricewaterhouseCoopers tax partner John Whiting.

To read the NAO report click here