In recent months, there has been a worrying rise in reports of VAT fraud. Fraudsters are targeting newly VAT-registered businesses by creating false Government Gateway accounts, assigning genuine VAT registration numbers to them, and filing fake VAT returns to claim refunds.

We have experienced this first-hand – one of our clients received an error message when attempting to add their VAT registration number to their Government Gateway account. The message stated that the VAT number had already been assigned to another account. Fortunately, we were able to resolve the issue with HMRC’s VAT technical team before any fraudulent activity took place.

HMRC is currently investigating signs of fraudulent use of VAT accounts and continues to enhance its security measures to detect and prevent fraud.

Our recommendation is to set up your Government Gateway account before completing your VAT registration. This means that as soon as your VAT number is issued, you can add it immediately and reduce the risk of it being fraudulently used.

There have also been reports of fraudsters changing bank details linked to VAT accounts. As agents, we’re unable to view or amend these details, so we strongly advise clients to log in regularly and check that their bank details are correct and up to date – particularly if you are due a refund from HMRC.

If you have any questions or would like to know more, please contact a member of the VAT team on 01227 277667, or by emailing us at vat@mphaccountants.co.uk. If you suspect any signs of fraudulent activity, please report it as soon as possible.