Eyeing tax credits in 2021? All about frauds & renewals


  • Tax credits are typically extra payouts from the government
  • Mostly, the low-income individuals are eligible claimants
  • In 12 months to 30 April 2021, phone scams rose 135 per cent

The personal earnings of individuals have taken a notable hit over the course of the last 15 months, largely propelled by widespread distress amidst the businesses due to the coronavirus pandemic. The government of the United Kingdom will be issuing the remaining renewal packs of tax credits to all the eligible individuals in the present month.

Individuals who are entitled to receive the tax credits in 2021 have been warned by the HM Revenue & Customs (HMRC) to stay watchful of any scams or possible frauds.

Tax credits in 2021

Tax credits are typically extra payouts from the government to the individuals who have a genuine requirement. The eligibility of tax credits is ascertained through several measures.

According to the official guidance issued by the HMRC, people belonging to the low-earning groups, individuals with disability, and a person who requires money to take care of children become eligible for receiving the tax credits in a calendar year.

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The tax credits distributed to low-income individuals can be identified by their net personal income, it can be from a self-employed job or from an employer. The child tax credits are issued to those who are not working and have a responsibility to look after the children. The quantum of tax credits that are issued by the HMRC depends on the total income earned by a household, including several other circumstances.

Rising frauds

With the ever-expanding accessibility of personal information including the mobile numbers, email ids, and other details mentioned on the social media accounts, it becomes quite easy for the fraudsters to contact the people and lure them in scams in the wake of providing monetary benefits, introducing themselves as government-authorised agents.

The HMRC has responded to more than 1.15 million referrals of suspicious contact from the public within the 12 months till 30 April 2021, the administrative body said. Of these, over 576,000 were offering bogus tax credits to the people.

During the corresponding period, the phone scams rose 135 per cent to over 440,000 as compared to the similar stretch in previous year. Following the increased cases of fraudulence, the HMRC along with telecom companies and the Ofcom removed over 3,000 malicious telephone numbers, while it took down more than 15,700 harmful web pages with the help of internet service providers.

Chances of a fraud

As per the HMRC, individuals can be tricked to process their tax credit renewals by fraudsters sending emails or text messages, posing themselves as HMRC officials. Scammers can lure individuals to share the personal details or ask for money transfers in exchange of pretended overpayment in the name of tax credit. The Cyber Security Operations controlled by the HMRC duly identifies and shuts such scams on a daily basis in order to safeguard the interest of the users.

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Going ahead, the double dealers can’t claim themselves as HMRC officials or make it appear that they are calling from administrative helpline numbers as the tax management department has managed to stop the usage of its helpline numbers by unauthorised people.

The HMRC has advised the taxpayers to avoid communities with suspicious individuals claiming themselves as officials from the department, if the users are unable to verify the identity of the caller. The customers can learn to report tax frauds and the measures to recognise the genuinity of an HMRC official and explore the scams checklist at the official webpage.

Renewing tax credits

  1. All the eligible customers who are expecting to receive tax credits in the present year are advised to notify the HMRC about any material changes in the earnings or circumstances that can potentially affect the quantum of their claims by 31 July 2021.
  2. The renewal process of tax credits has been made easy and quick. Individuals can either visit the GOV.UK or they can log on using the HMRC mobile application for checking the progress of their respective renewals.
  3. The smartphone application of HMRC can be used for renewing tax credits, reporting of any change in circumstances or earnings that can affect tax credit payments, reviewing the total earnings for the year, and checking the payment schedule for tax credits as prescribed by the department.
  4. The circumstances that can potentially affect the quantum of tax credit claims include any change in working hours, living arrangements, any rise or fall in income levels, or requirements prompted due to responsibility of children.
  5. All the eligible taxpayers entitled to receive tax credits are advised to not report any temporary changes in the working hours due to pandemic-induced restrictions or cutdown unless they are excluded from the umbrella of the job retention scheme.