June 2021 / United Kingdom

Tax credits customers should be alert to potential scams as HMRC responds to more than one million referrals of suspicious contact in the last year.

Tax credits customers should be vigilant and alert to potential scams, HM Revenue and Customs (HMRC) has warned, as the remaining annual renewal packs will arrive in the post this week.

In the 12 months to 30 April 2021, HMRC responded to more than 1,154,300 referrals of suspicious contact from the public. More than 576,960 of these offered bogus tax rebates.

In the same period, HMRC has worked with telecoms companies and Ofcom to remove more than 3,000 malicious telephone numbers, and with internet service providers to take down over 15,700 malicious web pages. HMRC responded to 443,033 reports of phone scams in total, up 135% on the previous year.

Anyone doing their tax credits renewal who has received a tax or benefits scam email or text might be tricked into thinking it was from HMRC and share their personal details with criminals, or even transfer money for a bogus overpayment.

HMRC’s Cyber Security Operations identifies and closes down scams every day. The department has pioneered the use in government of technical controls to stop its helpline numbers being spoofed, so that fraudsters can no longer make it appear that they are calling from those HMRC numbers.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

We’re urging all of our customers to be really careful if they are contacted out of the blue by someone asking for money or bank details.

There are a lot of scams out there where fraudsters are calling, texting or emailing customers claiming to be from HMRC. If you have any doubts, we suggest you don’t reply directly, and contact us yourself straight away. Search GOV.UK for our ‘scams checklist’ and to find out ‘how to report tax scams’.

Many scams mimic government messages to appear authentic and reassuring. HMRC is a familiar brand, which criminals abuse to add credibility to their scams.

If customers cannot verify the identity of a caller, HMRC recommends that you do not speak to them. Customers can check GOV.UK for HMRC’s scams checklist to find out how to report tax scams and for information on how to recognise genuine HMRC contact.

Tax credits help working families with targeted financial support, so it is important that people do not miss out on money they are entitled to. Customers have until 31 July to notify HMRC of any change in circumstances that could affect their claims.

Renewing online is quick and easy. Customers can log into GOV.UK to check on the progress of their renewal, be reassured it is being processed and know when they will hear back from HMRC. Customers can also use the HMRC app on their smartphone to:

• renew their tax credits
• check their tax credits payments schedule, and
• find out how much they have earned for the year

Tax credits customers must report the changes to HMRC. Circumstances that could affect tax credits payments include changes to:

• living arrangements
• childcare
• working hours, or
• income (increase or decrease)

Customers do not need to report any temporary falls in their working hours as a result of coronavirus. They will be treated as if they are working their normal hours until the Coronavirus Job Retention Scheme closes.

Following the Queen's key speech of 11 May 2021, on 30 June 2021, the United Kingdom introduced a new subsidy control system (the Subsidy Regime), which envisages replacing the EU State aid regulatory framework, to Parliament. The new UK subsidy regime aspires to provide UK businesses with quick and flexible financial support and encourages economic growth across the United Kingdom post-Brexit.

The key elements of the new UK subsidy regime are the following:

• it will be based on the premise that subsidies are permitted on condition that they follow UK-wide principles, such as the delivering of good value for the UK taxpayer in a timely and effective manner;
• UK public authorities enforced with implementing the new UK subsidy regime will deliver subsidies where they are needed without having to comply with excessive prerequisites;
• the devolved governments of Scotland, Wales and Northern Ireland will be enforced to decide on the issuance of subsidies by following a set of UK-wide principles;
• the new UK subsidy regime will prohibit the issuance of subsidies that will result in the relocation of jobs and economic activity from one part of the United Kingdom to another;
• unlimited government guarantees to businesses, as well as subsidies granted to "ailing or insolvent" enterprises, will be abolished in cases where no credible restructuring plan is presented;
• towards protecting and maintaining competition and investment, the new UK subsidy regime will introduce two specific categories of subsidies, i.e. "subsidies of interest" and "subsidies of particular interest", for which public authorities may conduct a more extensive analysis in order to assess compliance with UK-wide principles; and
• compliance with the new UK subsidy regime will be enforced through the UK courts and tribunal system. The Competition Appeal Tribunal will also be responsible for judicially reviewing the issuance of subsidies.

The new UK subsidy regime will take effect in 2022 subject to parliamentary approval.

The press release can be accessed here.

On 5 June 2021, the G7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States) agreed on supporting an international global tax reform agreement for multinational companies, creating new guidelines for corporations worldwide once a global deal is established at the end of 2021.

A face-to-face meeting was held in London on 4 and 5 June 2021 to help negotiate key elements of the deal. Now that an informal agreement is reached, the G7 leaders can subsequently officially sign it during the G7 Summit, scheduled to be held in Carbis Bay (Cornwall) from 11 to 13 June 2021.

Highlights of the agreement are:

• counterparts agree to reforms which will see multinationals paying tax in the countries where they do business; and
• a global minimum rate that ensures multinationals pay tax of at least 15% in each country they operate.

More information can be found on the website of the UK government and on the OECD website. Further developments will be reported as they occur.