HMRC warns of online self-assessment scam

HM Revenue & Customs is warning taxpayers who file their self-assessment tax returns online to be especially wary of fraudsters after finding that passwords for the service are being hijacked.

According to HMRC, a "small number" of users have had their details and passwords compromised by scammers, who made fraudulent tax refund claims through the account, hoping to route the refunds into their own pockets.

Around two-thirds of self-assessment tax returns were filed online this year, with more than 5.7 million people using the system.

While HMRC refused to speculate on how the criminals got hold of users' passwords, phishing and key-logging viruses are potential avenues for the scammers.

"You've got to be careful with your password, careful with your personal information and careful with your IT," an HMRC spokesman said, adding: "This stuff is like gold dust to fraudsters."

However, HMRC said its systems are secure and that it is working with the individuals affected and the police.

It is not the first time HMRC has been targeted by fraudsters. Last month, the taxman warned of a phishing scam that claimed to come from the department, offering a refund. The phishing scam encouraged recipients to supply their bank or credit card details to collect the supposed tax refund, leaving them open to having their bank accounts drained and the possibility of ID theft.