Scammers take advantage of businesses lacking awareness of EU VAT rules

George Hay Chartered Accountants

Businesses across the UK are being targeted by scammers who are charging them to unnecessarily update VAT registration numbers online.

Typically, businesses are told that as part of changes to EU legislation, which obligates all companies to provide their VAT registration number on ‘various’ documents since 2010, they as a company are required to update their information for purposes of database maintenance.

The service is initially free-of-charge with an option to update information past the basic entry, which ‘may’ incur a cost. What many businesses don’t realise is that, once the submission is made, the scammers then generate an invoice for a large sum of money.

The way in which the communications are worded makes clear that they are not affiliated with a public authority or any official entity, but still suggests that the update is a necessity, when it is not.

Online research shows that similar scams can be dated as far back as 2013, with businesses getting caught by complying with the instructions, only to receive a demand for payment later.

Although not listed as an official phishing scam on the HM Revenue & Customs website, HMRC do warn against similar bogus contact whereby services may be offered by other entities, not affiliated to the official body in any way.

Several local councils have already warned businesses about the scam and MPs have previously asked the treasury to investigate but, so far, no action has been taken and so the scammers continue to target UK businesses.

George Hay Partner, Richard Dilley, commented: “Phishing scams are widespread and unfortunately come in many different shapes, sizes, formats and guises. Businesses should be vigilant to suspicious communications always, as falling foul to any one of these operations could have disastrous consequences.”

“We would, of course, advise that if you’re unsure about any communications you receive relating to your accounts or tax affairs, you should contact your usual adviser in the first instance.”

For advice on this and any other accountancy-related matters contact us to speak with one of our experts.

Source: HMRC Phishing Examples

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