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Self assessment and Ukraine crisis fraud prompts warnings

Author: ICAEW Insights

Published: 28 Mar 2022

HMRC and the Charity Commission have both released guidance for avoiding self assessment scammers and bogus charities attempting to exploit the public.

Fraudsters have always preyed on times of crisis to step up their efforts to exploit the goodwill of the public. COVID-19-support fraud is a recent case in point – approximately 8.7% of the £60bn given out in furlough payments in 2020/21 was either fraudulently claimed or incorrectly paid, according to HMRC.

Accountants play a crucial role in developing public awareness and spotting red flags. “They understand fraud better than many,” says Sir David Green CB QC, chair of the Fraud Advisory Panel. “They also play a front-line role in the battle against certain types of fraud – their training and inherent professional scepticism gives accountants an edge when it comes to spotting things that simply aren’t right.”

ICAEW is reminding members to remain vigilant to the strategies that scammers might seek to employ as the next opportunity to strike arises. Unfortunately, the Ukraine crisis is one such opportunity.

The Charity Commission and the Fundraising Regulator have urged the donors to give safely to registered charities that are helping and supporting those affected by the invasion of Ukraine.

The Disasters Emergency Committee, a coalition of 15 leading UK charities, has launched its collective appeal to provide emergency aid and rapid relief to civilians suffering during the conflict. Many registered charities are also helping to provide vital life-saving services like water, food and healthcare to those caught up in the conflict, including those forced to flee to neighbouring countries.

“The public, as always in times of crisis, has responded generously to help those in dire need in Ukraine itself or who have escaped to neighbouring countries,” says Helen Stephenson CBE, Chief Executive of the Charity Commission.

She adds: “It’s important that this money goes to those who need it most – those whose lives have been uprooted by fighting. We encourage everyone to follow our simple steps to check that their money gets to its intended cause. Donating to a registered charity is a good way to feel confident of that.”

People looking to donate to causes working in Ukraine and neighbouring countries should make the following simple checks before giving: 

  • make sure the charity is genuine before providing any financial information;
  • check the charity’s name and registration number at www.gov.uk/checkcharity – most charities with an annual income of £5,000 or more must be registered, and you can use the advanced search function to identify charities working in specific regions and countries;
  • be careful when responding to emails or clicking on links within them;
  • contact or find out more online about the charity that you’re seeking to donate to or work with to understand how it is spending its funds; and
  • look out for the Fundraising Badge on charity fundraising materials. This is the Fundraising Regulator’s logo, which shows that a charity has committed to fundraise in line with the Code of Fundraising Practice.

The Charity Commission has also released guidance for charities and trustees responding to the crisis in Ukraine.

HMRC also sounds alarm on self assessment scammers

Separately, HMRC is warning self assessment taxpayers to be on their guard following the self assessment deadline after more than 570,000 scams were reported to HMRC in the last year. Taxpayers have until the end of this week (1 April) to pay all tax due from their 2020/21 tax return and not receive a late payment penalty.

At this time of year, self assessors are at increased risk of falling victim to scams, even if they do not mention self assessment. They can be taken in by scam texts, emails or calls either offering a refund or demanding unpaid tax, thinking that they are genuine HMRC communications referring to their self assessment return. In the 12 months to January 2022, nearly 220,000 scams reported to HMRC offered bogus tax rebates.

Myrtle Lloyd, HMRC’s Director General for Customer Services, says: “If someone contacts you saying they’re from HMRC, wanting you to transfer money or give personal information, be on your guard.

“Never let yourself be rushed, and if you’re in any doubt then check our ‘HMRC scams’ advice on GOV.UK.”

Criminals target unsuspecting taxpayers to try to steal money or personal information. They use phone calls, texts and emails to dupe citizens, and they often mimic government messages to make them appear authentic. In January 2022, phone scams rose to 3,995 compared with 425 reported in April 2020.

Taxpayers can report suspicious phone calls using a form on GOV.UK. Customers can also forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599.

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