Cyber criminals are hacking into online tax return accounts on the Revenue and Customs (HMRC) website, and are using the accounts to steal money by making false tax refund claims.
Millions of tax payers were on the receiving end of phishing emails claiming to be from HMRC in the run up to the self assessment tax deadline on 31st January 2016.
HMRC claims to have withstood around 17000 attempted fraudulent and incorrect claims totalling £100m during the last year. A spokesperson for HMRC told CBR that its computer systems have not been breached.
"Our online services have not been hacked and remain secure. We take our obligations around protecting customer data extremely seriously and have systems in place to review suspicious activity and monitor access to accounts. It’s only right that when appropriate we contact taxpayers and any agents acting to alert them to any concerns."
On Sunday 7th February 2016 the Sunday Times reported that one of its journalists had had their account hacked, and criminals had claimed tried to steal £1,826 using a false tax repayment claim. In this case the HMRC identified the transaction as potentially fraudulent.
Journalist Jackie Annesley said: "If the taxman is being hacked I cannot trust any bank or financial service."
The risk of self assessment tax accounts being hacked has been known for some time. HMRC found over 17,000 suspicious transactions amounts the 3.4m returns it checked in 2015, trying to claim a total of more than £96m.
In January 2016 CBR reported that a cyber attack resulting in mass data theft could cost HMRC £13bn in compensation to victims. The reputational damage to HMRC from a cyber attack would also be highly significant.
The personal data linked to a Tax return data is highly valuable to cyber criminals. It contains details such as a person’s banking history, their financial history, employment details, date of birth, and their address.
HMRC itself conceded to the Sunday Times that login details to online tax return accounts are "like gold dust to fraudsters" due to the level of data associated with them.
Having such information could allow cyber criminals to conduct very high level indentity theft, allowing them to things as advanced as take out a mortgage in their victim’s name.
The government has tried to improve cyber security around tax returns, bringing in the Gov.UK verify portal, which provides multi-factor authentication.
Nine million people are thought to have submitted their tax return online prior to the deadline.