A new VAT repayment fraud is on the rise – Key information

Reports are circulating of taxpayers’ bank account details being altered on the HMRC portal without their consent or knowledge, leading to VAT repayments being redirected to a third-party account instead of the rightful taxpayer.

This could result in significant financial losses for your company if you are targeted.

Who may be targeted?

Any VAT-registered business may be at risk of this emerging fraud trend, but HMRC believes that larger businesses are most at risk.

However, VAT practitioners and accountants have reported the majority of fraudulent cases they have seen involved smaller businesses.

Regardless, if you are a VAT-registered business, we strongly recommend taking action to protect your business from fraudsters.

What you can do about it

If you receive a letter from HMRC saying that they have amended your details, you should immediately check the bank details shown in your HMRC online services account. This can be accessed through your Government Gateway log-in.

If you spot an error, contact HMRC or your accountant immediately.

Even if you have changed the details yourself to trigger the communications, it is recommended that you double-check your online services account regularly to verify that all details are correct.

What is HMRC saying?

HMRC has confirmed that they are aware of a spate of fraudulent changes to taxpayers’ bank account details, and they have dealt with these where they have identified them.

However, when HMRC identifies a potentially fraudulent change, they are not notifying the taxpayer; instead, they are sending a standard update notice about amended details.

HMRC has also said that they would like to hear about all known instances of this fraud, with reference to the affected VAT registration number. Contact HMRC or your accountant immediately if you believe you have been targeted.