Thanks to HMRC’s controls, scammers will now be forced to use much less credible looking numbers but you should still be vigilant as scammers may try spoof other numbers. Advice for avoiding phone scams includes: • Recognise the signs - genuine organisations like banks and HMRC will never contact you out of the blue to ask for your PIN, password or bank details. • Stay safe - don’t give out private information, reply to text messages, download attachments or click on links in emails you weren’t expecting. • Take action - forward details of suspicious calls claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599, or contact Action Fraud on 0300 123 2040 or use their online fraud reporting tool if you suffer financial loss. • Check GOV.UK for information on how to avoid and report scams and recognise genuine HMRC contact. • Listen to an example of what a phone scam sounds like on Twitter • If you think you have received an HMRC related phishing/bogus email or text message, you can check it against the examples shown in this guide.
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Supply Chain Fraud 20 June 2019
HMRC is aware of increasing levels of fraud in labour supply chains and with companies offering payrol l services.
HMRC recognises that these arrangements are mostly used legitimately but would like employers to take extra care when engaging with these services.
Payroll Company Fraud, at its most basic, occurs when a business transfers staff and payroll responsibility to a fraudulent Payroll Company who supply the staff back to the business. When they are fraudulent, these Payroll Companies will not make the necessary payments to HMRC for Income Tax, National Insurance Contributions (NICs) or VAT. The companies conducting the fraud are not limited to specific sectors or business types – providing there is a workforce and a subsequent need for a payroll function, they can target any business. However, they are more likely to target companies whose financial position is weak, almost certainly to exploit this vulnerability with cheap payroll services, offering the struggling business an opportunity to cut in-house payroll costs.
The fraudsters can offer cheap services as, ultimately, they’re stealing the tax and NICs.
Co-Employment The co-employment model is something HMRC has seen more often recently. This is generally defined as when control and supervision of an employee’s activity is shared amongst two or more business entities. One company will be the original employer and the other/others will take over the personnel related functions, claiming that the workforce is employed jointly by all companies. There are a number of risks that can occur here – primarily with the new company set-up accruing debts to HMRC and then dissolving. Businesses entering into a co-employment model should undertake sufficient due diligence to ensure the business arrangements are tax compliant. Mini Umbrella Companies An umbrella company is a company that acts between the ultimate employer and the staff doing the work. The workforce is segmented into small companies with, usually, a very small number of employees in each company. This is done with the intention of exploiting specific allowances designed to help small businesses, with the aim of reducing the tax paid to HMRC.
With some of these schemes, promotors will offer “payroll services” to legitimate employment agencies, at a rate that is not commercially viable, sometimes with the offer of financial inducements to win the contract.
How can this affect you?
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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