Self-assessment tax scam warnings raised ahead of tax return deadline

Warnings have been raised about the rising threat of scams targeted at those who file self assessment tax returns.

Around 12 million taxpayers file a tax return each year, including the self-employed, who could be at risk as scams rise.

HM Revenue & Customs (HMRC) has urged those who file self assessments to be on their guard against scammers attempting to dupe them into sharing their personal or financial details, after having acted on thousands of self assessment scam reports over the last year.

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With the tax return deadline just a couple of months away and many people set to file over the festive period, what do you need to do in order to protect yourself from tax return scams?

How do self assessment tax scams work?

Self assessment tax scams can work in a few different ways, but all involve the scammers impersonating HMRC.

They have become more sophisticated at doing this, with recent years seeing more convincing communication from scammers, such as genuine looking emails and text messages.

Once they have convinced you that they really are from the tax man, that’s when the scam kicks in.

In some cases the scam will try to win you over by offering you something, such as a tax rebate. In order to claim this supposed repayment you will need to share certain personal and banking details, either over the phone or by following a link in an email or text message from the scammers.

However, as this is not genuine, the scammers will instead use that information either to take money directly from your accounts, or more commonly to commit identity fraud by opening financial products in your name and making off with the proceeds.

An alternative route is to threaten you, using that fear of punishment to get you to either share your details or even send money directly to the scammers.

For example, over the last few years there have been many reports around scammers claiming to be HMRC and warning victims that they have underpaid tax, with the risk of arrest if they do not clear the ‘unpaid tax bill’ immediately.

In some cases they have encouraged victims to purchase gift cards worth hundreds of pounds in order to clear what’s owed, and then read the gift card’s unique number over the phone to the scammer.

Why are self assessment tax scams likely to rise?

HMRC received 144,298 reports about tax scams in the 12 months between November 2023 and October 2024- up 16.7% annually.

Around half of all scam reports (71,832) in the last year were fake tax rebate claims, HMRC said.

What’s more, we are heading into a period of the year when they become a more common tactic for scammers.

Many people use the quieter festive period to file their tax return. With those tax bills on our minds, the promise of a tax rebate ‒ or the threat of punishment over unpaid bills ‒ becomes more acute, potentially making taxpayers more likely to fall for the scam.

The economic situation also makes them a more appealing option for scammers. While inflation is falling, it has been persistently high over the last year, and many of us are feeling the pressure on our finances. As a result that may make us more susceptible to promises of a supposed tax repayment from HMRC.

There is also the simple matter of numbers, with greater numbers of people having to file a tax return than was previously the case.

AJ Bell highlights that cuts to the tax-free limits on capital gains tax and dividends tax, as well as lower the threshold for the additional rate income tax band, means more people than ever will be filing a return.

“Last year saw a record 11.5 million taxpayers file a self-assessment return by the 31 January deadline, with rising interest rates, reduced allowances and frozen tax thresholds combining to force more people than ever before into the tax return trap," says Charlene Young, pensions and savings expert at AJ Bell.

"With this year set to break records once again, HMRC has issued a warning for taxpayers to be on the lookout for scam activity.”

What should you do if you are targeted by a self-assessment scam? 

There are a few different steps you need to take if you are targeted by a self-assessment scam.

First off, it’s important to report suspicious messages directly to HMRC.

You can:

• Forward suspicious texts claiming to be from HMRC to 60599
• Forward emails to phishing@hmrc.gov.uk
• Report tax scam phone calls to HMRC on GOV.UK

It’s also worth reporting any dodgy messages to Action Fraud, the UK’s national fraud and cyber crime reporting centre.

If you fear that you have fallen for a self-assessment scam, then it’s really important that you speak to your bank as soon as possible. They may be able to step in and cancel any payments you have scheduled to the scammers, for example.

It’s also a good idea to keep an eye on your credit report. That way you can see if any applications for financial products in your name have been made, allowing you to step in and cancel them if they have come from the scammers rather than you.