HMRC is cautioning contractors in the UK to stay vigilant against tax scams. This warning follows an alarming increase in fraud attempts, with over 130,000 tax scams reported between September 2022 and September 2023.

As the Self-Assessment deadline on 31st January 2024 approaches, taxpayers are advised to be particularly wary.

Last week’s announcement revealed that nearly half (44.6 per cent) of these scams involved tax relief schemes. These fraudulent activities vary in approach, ranging from false reminders to update tax details to threats of arrest for tax evasion.

With an estimated 12 million people completing Self-Assessment, the likelihood of scam attempts is expected to rise in the coming months.

This increase in fraud is attributed to current economic conditions. The Association of Certified Fraud Examiners’ 2009 report highlights a direct correlation between economic downturns and a rise in fraud incidents.

Myrtle Lloyd, Director General for Customer Services at HMRC, has urged taxpayers to be cautious of fraudsters as the Self-Assessment deadline nears. She warns that criminals often use emails, phone calls, and texts that mimic government messages to appear legitimate.

HMRC advises the public to be sceptical of unexpected contacts, which could be scams. Taxpayers are encouraged to check HMRC’s scam advice on gov.uk for guidance on identifying fraudulent schemes.

Over the past year, HMRC has already acted against 60,000 phone scams and removed 25,000 malicious web pages.

However, concerns persist due to recent reports of HMRC’s outdated IT systems being prone to cyberattacks and data breaches, potentially exposing taxpayer information to scammers.

HMRC has reported several data breaches to the Information Commissioner’s Office in recent years, indicating a growing risk.

To combat this threat, HMRC encourages the reporting of any suspicious tax-related communications. Texts claiming to be from HMRC can be forwarded to 60599, emails to phishing@hmrc.gov.uk, and phone scams can be reported on GOV.UK.

It is crucial to learn how to identify and report these scams to protect yourself, your company and sensitive financial information.