15/02/24

UK: HMRC Warns of Tax Refund Scams and Urges Vigilance During Transfer Pricing Audits

As published on: bnnbreaking.com, Thursday 15 February, 2024. 

HMRC is warning taxpayers of an increase in phishing scams offering bogus tax refunds. As transfer pricing audits ramp up, individuals and businesses must remain vigilant and informed to protect their financial interests.

As the 2022-23 tax season draws to a close, the HM Revenue and Customs (HMRC) has sounded an alarm over a surge in phishing scams targeting taxpayers with bogus tax refund offers. With more than 200,000 suspicious contacts reported, the public is reminded that HMRC does not contact customers for refunds via email, text, or phone calls.

Fake Tax Refunds: The Art of Deception
In an era where digital communication reigns supreme, cybercriminals have found fertile ground in tax-related scams. HMRC has warned taxpayers of a significant rise in malicious web pages and phishing attempts, as fraudsters seek to capitalize on the recent surge in completed tax returns.


These scams typically involve unsolicited emails, texts, or phone calls, promising tax refunds in exchange for personal details or bank account access. The sophistication of these schemes often leaves unsuspecting victims in financial distress, with sensitive information compromised and hard-earned money lost.

HMRC's Transfer Pricing Audits: A Closer Look
As HMRC ramps up efforts to combat tax evasion and fraud, transfer pricing audits have become a central focus for the revenue authority. The International Tax Manual and the upcoming Guidelines for Compliance (GfC) product provide valuable insights into HMRC's key focus areas and approaches during transfer pricing audits.


Some of the critical focus areas include:

Industry sweeps: Targeted examinations of specific industries or sectors
Cash-based jobs: Inconsistencies in reported income and expenditures
Tip-offs: Information provided by third parties or whistleblowers
Large unexplained changes in income: Fluctuations that raise red flags
Reporting discrepancies: Inconsistencies between tax returns and supporting documentation
Past issues: Taxpayers with a history of non-compliance
Preparing for the Unseen: Mitigating Risks in Transfer Pricing

Multinational Enterprises (MNEs) can take several proactive measures to prepare for potential disputes and mitigate risks in transfer pricing. Organized record-keeping, accurate reporting, and seeking qualified advice are essential cornerstones of a robust defense strategy.

In the event of an investigation, HMRC will scrutinize income confirmation, expense verification, personal versus business accounts, and cash transactions. Taxpayers should familiarize themselves with their rights and request receipt notices to ensure transparency and accountability.

Ultimately, the responsibility lies with taxpayers to remain vigilant against scams and maintain compliance with HMRC's regulations. By staying informed and proactive, individuals and businesses can safeguard their financial interests and contribute to a fair and transparent tax system.

In these uncertain times, HMRC's call to action is clear: stay alert, stay informed, and don't take the bait.

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UK HMRC Transfer Pricing

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