UKauthorITy.com reports that Cabinet Office minister, Francis Maude, in an interim report has claimed that steps taken to tackle fraud worth £21BN a year across the public sector had saved £12M in their first few months.
Maude said that eight pilot projects had had shown "immediate and startling results" and signalled the end of the "pay first, check later" culture.
One of the projects involved HMRC, which spent (Maude uses the Gordon Brown weasel word "invested") £1M on an "innovative" screening technique for tax credit applications. The tool analyses information provided by prospective claimants on their tax credit application form, compares this against internal and external data, from credit reference agencies for example, and decides the likelihood of the application being fraudulent.
"HMRC piloted the exercise on approximately 4,000 new tax credit applications to test proof of concept and subsequently piloted the new process preventing losses of £10.63m between September 2010 and March 2011".
That seems to be a positive result. However, there still appear to be fraud issues in other areas that need to be addressed.
The ICAEW report the following:
"We have just been advised by one of our members that self assessment tax return fraudsters have struck again...
..the fraud involves repayment claims which are submitted to HMRC online using valid log in details and passwords, requesting payment to a third party bank account."
This chimes with an email I received recently from a loyal reader, who advised me that 91 of his accountant's files had been hacked (it is not clear as to whether the security issue is a failing of an HMRC system, the Government Gateway website or at the accountant's office). I reproduce the text of his email in full:
"We recently returned from holiday to the news that 91 of our accountant's client accounts had been hacked at the HMRC Government Gateway Website, in short hackers had accessed information on 91 individuals or organisations and had entered false end of year accounts in order to claim Self assessment refunds.
The individuals responsible for the aforementioned fraud had managed to set up 91 separate accounts in various banks in the UK and had provided HMRC with the false account numbers and sort codes in order that payments were made direct.
Our accountant spent days talking to HMRC officials advising them of the fraud and I tried constantly to contact them at .70 pence per minute to no avail, I telephoned the police at both Peterborough and Scotland Yard who both said "well it's not your money why worry".
I contacted a corporation tax official who was horrified and did what she could but hit a brick wall, the National Fraud helpline were unable to help and my MP (name supplied) did not have the decency to respond to either my telephone call or my e mails.
Well guess what, we then received a letter from HMRC to advise us that the refunds were on their way to what we knew were false accounts, they actually paid out, HMRC now apparently know what they have done but to add insult to injury they have now started to send demands for repayment to the people who's accounts had been hacked, I myself received one this morning.
This is my last attempt at bringing this matter to light.."
In a further update, it seems that HMRC have now admitted that my loyal reader owes them nothing.
The above indicates that, whatever Maude says, there are still issues that need to be addressed.
Tax does have to be taxing.
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