Crime gangs attack self-assessment

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 

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