Avoiding online tax scams: What should SMEs look for?

Online tax scams are a real danger for small business owners. Malicious actors target your business’ finances in many different ways; it is of vital importance that you remain vigilant in the face of cyber attacks around your tax payments. 

According to official Government statistics, business fraud totals £137bn a year. Tax fraud accounts for £15.4bn of this amount. This figure is rising, with the added financial pressure of the Covid-19 pandemic and now the cost of living crisis seeing tax fraud rise by 19.3% over the past 24 months. 

In this article, we’ll answer the following questions: 

What are the most common tax fraud schemes attacking small businesses in the UK today? (And how to spot them)

It is important to differentiate between the types of scams, and the tactics that are employed to execute them. The most common schemes can be broken down into the following categories:

Fake audits and unpaid taxes: An actor appearing to be from HMRC will get in touch claiming that your business is due for an audit, or they will suggest you have either not paid, or underpaid, your tax bill for the previous accounting period. Once you have been deemed ‘compliant’ by the scammer, they will then request payment.

Fake rebates or refunds: If your business is expecting a rebate from HMRC, scammers will get in touch with a phishing link, through which you can ‘claim’ your refund from the revenue services. This link is designed to collect your details, normally through a form, which is then used to steal your identity, and claim your businesses’ refund.

Incorrect refunds: This scam is less common. Scammers infiltrate tax systems, and produce an incorrect refund on your behalf. Once they have sent that out, they then contact the business, pretending to be the local tax office, requesting these funds then be returned. This is a sophisticated attack, as it often presents details that only you and HMRC should have on record.

The tactics used to execute these scams are generally as follows. Here’s how you can spot these malicious attempts at stealing your money:

Fake charities: Donations to not-for-profit organisations are deductible, and can therefore reduce your bill at the end of the year. Scammers impersonate charities, pocketing money you thought was going to a good cause. Always ask for proof the charity is registered before making donations.

What can businesses do to protect themselves from tax scams? 

Now we know what to look for, here are some general tips for making sure your business isn’t taken advantage of:

Consult your accountant: Properly trained tax experts will be like a bloodhound for these scams. They can sniff them out a mile off. Once you’ve found a trusted accountant or bookkeeper, they should be the only other party with access to your records.

What are the signs you’ve been scammed, and what should you do next? 

The typical signs you’ve been scammed are:

If you have been a victim of fraud, or suspect you have been a victim, report the crime to Action Fraud at 0300 123 2040 or use its online fraud reporting tool

To report suspected phishing campaigns, forward the email in question to: phishing@hmrc.gov.uk.

If you want a trusted accountant partner to check in with, or for more advice on how to keep your business protected, get in touch with Pennyhills today. 


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