What should be the tax liability of people who are the victims of fraud? That is the important question raised by the case of victim Mike Grogan, writes George Turner Mike Grogan is one of a number of victims of tax advisor fraud, where scam tax advisors make fraudulent claims for tax rebates on behalf of their clients, pocketing the money themselves before disappearing, leaving the victim with a large tax liability when HMRC uncovers the fraud and seeks to reclaim the tax.
In Mr Grogan’s case, a colleague recommended an adviser who claimed to be able to access tax reliefs on out-of-pocket expenses connected to his work. Many financial frauds rely on referrals that see clients paid to refer friends and colleagues. People will let their guard down when approached by a trusted contact.
After engaging in some correspondence with the person from the firm he provided them with his identity documents to make a claim on his behalf, and he received £3,883. Having an agent submit a tax return on your behalf is nothing unusual, however, as Mr Grogan would later discover, the fraudsters had used his details to impersonate him and submit returns in his name. They changed the nominated bank account to their own account and put in claims for £11,494, pocketing the difference.
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