Identity theft and tax fraud: 6 ways to stay safe

There’s a grim opportunity for identity theft and tax fraud to coalesce. It’s a category of crime where if you are a victim it could cost you thousands. Fortunately, there are some simple actions you can take to keep yourself protected.

Identity theft and tax fraud: what is it?

There are two main types of tax-related identity fraud. The first occurs when a criminal uses your personal/tax information to file a fraudulent tax return to obtain a tax rebate – often paid electronically straight into the criminal’s nominated bank account.

The second type occurs when someone uses your tax information to get a job or receive income. This might be an individual who is – for instance – not legally allowed to work in their country of employment. If this happens you may find yourself liable for the tax on the criminal’s income.

What’s frightening about identity fraud is it’s invisible. The first you may know about it is when you go to file a tax return. Or receive suspicious communication from the tax officials about an unpaid balance. Unfortunately, the fact that these crimes are intangible means that many people are careless when it comes to preventative measures.

Let’s make sure you’re not one of them by following our six simple tips


  1. Shred it

It doesn’t take a huge amount of personal information to be able to fraudulently file a tax return in someone else’s name. Any paperwork you receive that contains details of your tax details, your national insurance number (or equivalent) or any other revealing information should be treated with care. If you don’t need it, shred it before you bin it. Assume that criminals will be going through your bins.

  1. Protect your digital landscape

“Go paperless”: a concept that’s great for the environment, not so good for security. The same applies with online bank accounts. You’ve heard it a million times before. But be sure to protect your computers and digital infrastructure with anti-virus software and resilient firewalls. Run security updates as soon as you are prompted and change your passwords regularly.

  1. Be vigilant to scams

Cyber criminals and identity thieves aren’t stupid. On the contrary, they have some incredibly sophisticated techniques for wheedling information out of unsuspecting victims. Remember that tax officials or banks will never contact you with a request for personal information. So never give it away, unless you have initiated the contact. As for scams, the old adage holds sway: if it sounds too good to be true, it probably is.

  1. Check your credit report regularly

Your credit report will show you exactly what bank accounts and credit lines are open in your name. While it won’t reveal details of tax fraud, the presence of an account or credit line that you haven’t opened is a sure sign that someone has your identity details. Check your credit report every three to six months.

  1. Listen out for data breaches

Another day, another data breach. That’s how it feels when you skim the tech news. And you should be alert to any breaches that involve companies who hold personal information about you. If the worst happens find out what’s been stolen and then take actions to keep yourself secure, such as changing your password.

  1. Report suspicious activity

If you find out you have been a victim of identity fraud, report it immediately – both to the police and your relevant tax body. You should also tell your bank. And if you identify a scam that failed to catch you out, inform the police. If nothing else you may prevent someone else from becoming a victim of tax-related identity fraud.


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