Morfitt's Mailshot Issue 47...          Can't see this email properly? View in browser

Morfitt & Turnbull

Issue 47   

Taxpayers have reported more than 2.6m communications from fraudsters pretending to be from HM Revenue & Customs (HMRC) over the past three financial years, according to official data.
A Freedom of Information (FOI) request submitted by think tank Parliament Street to HMRC has found that in the past three years taxpayers submitted 2,602,528 reports of phishing via email, phone and other methods to the tax office.

In the 2016/17 tax year the highest number of reports were received by HMRC at 921,900. In 2017/18 there were 782,982 reports and 2018/19 totalled 897,649, an increase of 15% on the previous year.
Phishing emails based on tax rebates were the most popular, with a total of 1,957,003 reports made about them. This was despite HMRC implementing a verification system in November 2016, called DMARC, which allows emails to be verified to ensure they come from a genuine source and this has stopped half a billion phishing emails reaching customers.

The second most popular type of scam was via text message with a total of 150,009 complaints reported in the past three years, but reports of this method of phishing declined by almost half between 2016/17 and 2018/19.
However, the data showed that reported phone scams have significantly increased, with just 407 reported in 2016/17, rising to 104,774 reports in 2018/19. Over the past three years, the number of phishing websites reported for removal totalled 50,323, with 2017/18 being the worst year with 19,198 reports. From 2017-18 HMRC asked a record 20,750 websites to be taken down, a 29% increase on the previous year.

The data also provided insight into the number of taxpayers who claimed they had disclosed personal financial details to scammers. In the past three years, this figure totalled 18,792, with 2016/17 seeing the most reports at 10,647, signaling a growing awareness among consumers to guard their personal data.
  Phone Scams
A chief executive of a software company that prevents phishing, commented that: "What we see happening here with HMRC is happening across the board. Impersonation phishing attacks are on the rise as cybercriminals think up new ways to encourage people to share personal data or transfer money."

What better way to convince an individual to share information than to impersonate a position of trust and authority. The problem is that the digital world has altered the way trust develops online. Without the typical behavioral cues we use when physically interacting with a person, it becomes easier for hackers to manipulate people’s trust and increase the believability of a message. Hackers are also making their messages more convincing.

In early June it was revealed that recent steps taken by HMRC to prevent fraudsters copying the tax authority's telephone number have already reaped rewards, leading to a 25% drop in overall scam reports and no new impersonations via this channel. 

In April the taxman introduced stricter controls in partnership with Ofcom to stop fraudsters spoofing HMRC's most recognisable helpline numbers, often those beginning with the digits 0300. In January 2019, the government also banned cold calling in the pension industry to prevent pension scams but this ban does not apply to other areas such as taxation.
So the moral of the story is, if you have any doubt at all after getting an unexpected communication regarding tax, investments or pensions be very careful and thoroughly check it out before acting upon it.

If you ever have any queries on this type of issue just let us know and we will give you our opinion etc. as we have done on many occasions already!



Adam's Technical...  Making Gains
When a personal shareholding or investment fund is sold that is assessable to Capital Gains Tax (CGT) there may be tax due on the gain.

The net gain is normally calculated as the sale value minus the price paid minus any costs involved with buying and selling the investment. The calculation is more complex if multiple sales and purchases have taken place.
The allowance, upon which no tax has to be paid, is £12,000 this tax year. It was £11,700 in the 2018/19 tax year. If the gain is higher than the allowance, tax has to be paid.

Once the net gain has been calculated and the CGT allowance of £12,000 deducted, the next step is whether the gain is under £37,500. This is because all individuals receive the basic rate income tax band of £37,500 upon which gains are taxable at 10%. This amount is restricted if an individual’s gross income exceeds the income tax-free personal allowance of £12,500.
  Capital Gains
Please see example below:

The net gain is £52,000 and the individual receives gross income of £20,000.
  Total taxable income is £20,000 - £12,500 (personal allowance) = £7,500
  The taxable gain on the investment is £52,000 - £12,000 (CGT allowance) = £40,000
  The first £30,000 of profit (£37,500 (basic rate band) - £7,500 (taxable income)) is taxed at 10%
  The remaining £10,000 of profit is taxed at 20%
The total tax is £5,000 (10% at £30,000 plus 20% at £10,000).

Once an individual’s gross taxable income is over £50,000 (total of the personal allowance and the basic rate tax band) the gain, after the CGT allowance has been deducted, is wholly taxable at 20%.

Please note that sales within ISAs, pensions and investment bonds are not assessable to CGT. If you wish to discuss the above or want any assistance, please contact your M&T adviser.

Gareth Says... 

As we know, ‘time waits for no man’ (person!)

It is 20 years since ISA’s were introduced. It is over 30 years since the launch of PEPS. It is amazing how quickly values can accumulate.
We got our first PEP millionaire in 1997 (this was due to being able to put ‘free’ flotation shares into PEPS!).

We now have many clients with over £1 million in ISA’s. This has recently been made more achievable due to inheritable ISA’s, where spouses can inherit ISA’s.

Therefore it pays to do ISA’s every year and you too may soon join our ever increasing list of ISA millionaires!!

Happy investing.

Staff Matters - Fantasy Football
Zara finished a close runner up in the 2017/18 edition of the M&T fantasy football league. She did her homework last summer and reached the top of the podium in the 2018/19 season with an impressive tally of 2,203 points. In related news, last year’s winner Adam took his eye off the ball, finishing in 18th place and Stuart failed in his usual wooden spoon endeavours, finishing 26th out of 27 entries.
The competition is free to enter with prize money for first and second place. We have looked at the budget, a tad smaller than Man City’s, and increased the prize money! In honour of financial services industry practice, we have made the decision to increase the prize money by the higher of inflation, the Bank of England base rate or 3% p.a. over the last five years. The winner is 3% p.a. This means last year’s £100 first prize is re-valued to just shy of £116 on cumulative basis, which we will round up to £120. The runner up prize is half this amount at £60.     Fantasy Football
If you want to mount a challenge for the prize money next season and are new to the game, please e-mail:  He will e-mail you joining instructions when the new season is up and running on the fantasy football website. Players who took part last season can login, set-up a team and they will automatically be entered into the M&T league. If you are not, please e-mail Adam.


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