Fraud Victims Treasury Meeting and Funeral Scams

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BBC Sounds. Music, radio, podcasts. Hello, welcome to this Moneybox podcast. Parents are struggling to get the information they need to take up free childcare for two-year-olds, which is due to start in April in England. Thieves are stealing the identity of bereaved families to steal money from friends and relatives of the person who died. And side hustle hassles. We explain the rules about paying tax when you sell things online.

But first we return to that story of stolen pension funds and HMRC pursuing victims for tax on money they no longer have. There's been a development this week, but first let's hear from one victim of this double attack, Russ Ferris. is now a fireman. He had most of his £35,000 pension fund stolen from him and HMRC is demanding tax on that stolen money.

I asked him who advised him to cash in his pension, which dates back to his time at Royal Mail. This wasn't done at sort of 3am in a dimly lit car park. This was done in a... you know uh financial advisors a government registered financial advisors office this you know it was it was all done in broad daylight and all those the forms were signed and and royal mail released my pension too

these people so you know at no point did i ever think that i was doing anything wrong the thing is you know i've always always paid my my taxes and i know how important it is to pay your tax because all your taxes go to um funding frontline services and i am on the front line so if your house is burning down or if you find yourself trapped in your car it's me that turns out so i know

uh how important it is to to pay to pay your taxes i've always paid my taxes i've paid my taxes since i was 16 and i would never ever dream of entering into anything that i thought was remotely illegal but the The downside to all this really is you're not ever really treated as a victim of fraud. Instead, you're kind of vilified as a tax avoider.

Unfortunately. More from Russ later. But this week there was a meeting between government and people campaigning for victims of this double blow. Caroline Noakes was there. She's a senior Conservative MP who co-chairs the all-party party. Thank you. I felt the meeting was very positive. He certainly wanted to listen, wanted to understand the issues.

I think one of the challenges that we have is that it's actually very complicated and hard to get across in a succinct manner quite the impact this fraud has had on all of those victims. Did you feel that there was a change in attitude? I felt that the minister wanted to get a grip of this and for me that's progress. I want him to give the victim some time to explain the severity of their situation and I also want the...

Treasury and HMRC to work together to find a solution to people who are victims of fraud, who effectively are being taxed on money that was stolen from them. The Treasury and HMRC do have a duty to collect taxes, don't they, that people legally owe. And you don't dispute these people legally owe this tax. Why should they be left off?

Well, look, what is very clear is that these individuals are victims of fraud. And the people who perpetrated that fraud have not been brought to justice. And it feels to me as if HMRC, and you're right to point out, they have a duty to collect tax. also have a duty to pursue the individuals who were the ultimate beneficiaries of this fraud and not the poor victims who are sat terrified that having lost their life savings, they're also going to lose.

the roof over their heads, they're going to be made bankrupt. And they are genuinely terrified that there is no way they can pay these bills and that HMRC has not grasped that they don't have the money. How urgent is it in your view that they do get... at least some steps towards solving their problems.

I think what the victims want is a clear roadmap as to how this can be addressed. They want to see dialogue with HMRC and the Treasury. They want ministers to understand the depth of the problem and the scale of the problem. Interestingly, the numbers of victims are not that high, but for the individuals concerned, this is a matter which is...

really impacting their mental health, which has a knock-on effect to their physical wellbeing. We've seen relationships break down. We've seen attempted suicides. And all because... Really despicable people defrauded them of their life savings. And we don't want the government to then pursue them for tax amounts that they simply cannot pay. Mike, your proposal set a dangerous precedent, though.

However sorry we feel for people, however much they've been defrauded, we can't let them off tax they owe. And these people owe this tax, however unfair that might seem to people. The fundamental issue is that... These people's savings were stolen. They're being charged a tax liability on money that they have not seen for years and years and have no hope of recovering. And in some instances, have no hope of earning any money to pay that tax.

The stark reality is it could well cost more to pursue these individuals than the Treasury could ever hope to recover. We're asking for a pragmatic solution that looks at the individual cases separately. and takes into account their individual circumstances. and shows a bit of compassion towards them, and recognising that they're the victims of crime. These are not people who set out to defraud HMRC. They were the victims of the fraudsters. Caroline Noakes, MP.

month pause in being chased for tax would mean to him. Oh God, I can't tell you how much that would help. No, it's really hard to get across, but it's almost like being held underwater, Paul, and I'm not trying to... you know sensationalize this but um you know i've been living in in really in fear of hmrc and and you know

you know it's intimidation and you know as i say we're just normal normal people so to think that you wouldn't have to you wouldn't have to think about this for six months when i've been thinking about this for the last 11 years would be Well, I hope, I pray, I hope that something like this could possibly happen. Yeah, because that would give me six months where I wouldn't have to worry about it. Or every time the postman comes and the letter drops on the map.

You know, you're all mentally diverted down the hallway looking to see if you can see the envelope on the doormat, that brown envelope. One of the reasons she's asking for a six-month pause is to look at some long-term plan to help. the people who are in your position, what would you like that to be? What would you like HMRC to do?

God, really? Just to be able to speak to you on a human level, Paul, to be able to say to you, look, you know, if worse comes to worse and you have to pay this money back.

you know we'll we'll sort out some sort of payment plan or we can give you some sort of advice or some sort of help or you know like like i said yeah there's no there's there seems to be no ethical boundaries with with these people it's basically we're going to boot the door off your injuries and if you haven't got our money we'll be sending debt collectors around to get it that's basically what

you know how they how they act you know it's it's it's not as coarse as that but you know i would like to see some sort of support like i said to you you know you know i i am i am a victim of fraud

But I am treated like a tax avoider. What impact has this had on you and your family? You know, it's... The word I would say is disastrous, really, because... you know the state of your mental health and i know that seems to be a bit of a buzzword at the minute but you know you know this is constantly on on my mind you know and has been for the last 11.

So on a mental health side of it, I can't tell you the impact it has, but you've still got to go work, you've still got support of family, you still have to be a caring dad, you still have to be a caring husband. But it's very, very, very hard to put yourself, to throw yourself into all those situations when really this way is so heavy.

so heavy on your shoulders i'll be honest if i don't mind telling you this is you know this has broke me on several occasions but you know you still have to get up in the morning you still have to go through your daily routine You still have to pay the bills. It's tough. It is so, so tough. Firefighter Russ Ferris. The Treasury told us...

We sympathise with people who may have lost money by entering such arrangements. We take the wellbeing of all taxpayers seriously and recognise that dealing with large tax liabilities comes with significant pressure. Our message to anyone who's worried about a tax liability... is to contact HMRC as soon as possible to talk about options. It added, We do not tax pension savings lost to fraud. What we do tax are amounts that people released from their pensions were not authorised in law.

which can, of course, as with Russ, be pension savings lost to fraud. Campaigners are due to meet the Treasury again in February. We will, of course, keep you up to date with developments.

Working parents of two-year-olds are struggling to get a code they need to register for 15 hours a week of subsidised childcare in term time, which begins in England in April. There are also reports of technical glitches and staff shortages. Sarah Rogers is with us. Sarah, you reported on this new scheme earlier this month when parents and nurseries began to report difficulties. Where are we now?

So this is a story, it's still unfolding with a number of issues. So firstly, this is how it should operate. Working parents need a childcare account, they need to reconfirm their details every three months, and this produces a code.

which parents give to the childcare provider to process. But some listeners got in touch with us to say that they were worried that they wouldn't get their code in time because they couldn't reconfirm their details until the end of March. Now, the funded hours begin on April the 1st, so clearly...

worries they were cutting it a little bit close. I did ask the Department for Education about this a few weeks ago. It told me it was investigating and working on a solution. Now the government has acknowledged an IT issue and says it will start sending... codes to all affected parents next month. Now another concern I've read about is that nurseries, how will nurseries cope with all the extra two-year-olds whose parents want this subsidised childcare?

Yeah, I have heard from nurseries which have seen a huge surge in inquiries, including Julie Robinson from Bolton. I went to see her when we first ran the story. Demand's huge, and we already had a waiting list. We've been inundated with emails, what does that look like for me? Are you able to offer this for me? If you can't, I need to go somewhere else. I know the nurseries round here are already full to capacity, so I don't know how. how we are going to meet that demand.

And then so alongside that, some nurseries don't yet know how much funding they're getting. And this involves money from the government, which is then passed to local councils. They then calculate the funding rate and pass it on. So lots of organisations involved. Sarah Julie said her nursery was already full to capacity and there were concerns expressed in Parliament this week, weren't there, about the number of staff who will be needed for these extra children.

Yes, Labour's Shadow Minister Florence Eshalomi asked government minister responsible, which is David Johnston, about a report that tens of thousands of additional earlier staff will be needed this year as the scheme expands. He agreed more staff... were needed. And the Department for Education told me a nationwide recruitment campaign will be starting shortly. So very gorgeous. Thanks very much indeed. And as I said, that scheme is England. Other parts of the UK have their own provision.

Thieves are stealing the identities of bereaved families to try and steal money from friends and relatives of the person who's died. The National Association of Funeral Directors says it's seen a spike in such frauds in the past few weeks. The criminals take online images of the deceased and clone social media accounts of bereaved family members. There they ask for donations to...

charity, help with expenses and even pretend to sell access to live streams of the funeral. Then, of course, they keep all the money. Connor's sister Vicky died last year, aged 44, and that was just six weeks after she was diagnosed. with cancer. In the following days, a fake profile was set up by thieves asking for donations it said would go to charities. Connor told our colleagues at Radio Ulster it was overwhelming.

angry and I was so disappointed and and then a strange kind of I was I was almost embarrassed and I know that's not a rational thought but you know I kind of

It was kind of taking it on, you know, ourselves, thinking, my goodness, I hope none of our, you know, loved ones, family and friends have fallen victim to this. In this kind of era of social media, I really would challenge, you know, the social media giants. You know, I don't believe personally that... the right controls and checks and balances in place you know I don't understand how you know a fake a fake profile with the same picture the same name is allowed in the era of algorithms

You're completely exhausted as it is, and it's just another, you know, it's another fired fight. And, you know, when you're running on vapour as it is, it was a very, very difficult time. Connor and the funeral directors took prompt action to warn relatives and friends and Connor believes no one lost any money. But this wasn't the only a case, Radio...

Ulster heard about. Paige's family was targeted after her grandmother died earlier this month and a fake profile was created which attempted to charge people for a fake live stream of her funeral.

The amount of feelings that were running through my head, it was just, I just couldn't believe somebody could do this. I was on my phone in my husband's car while he was driving trying to... find out what was going on and trying to say who this person was replying the comments that they had put a link and telling people on the death notice please don't click this link because it's a scam it's asking for bank details it just feels like the death Paige.

Listening to that is Nick Britton from the National Association of Funeral Directors. Nick Britton, we cover a lot of frauds on Moneybox, but hearing the anguish that Connor and Paige went through this, this really is a heartless crime, isn't it? Well, it is because you are dealing here with bereaved people, people who are vulnerable, people who are often elderly or who may not be that tech savvy. where they're already suffering grief, they're already in a bad place.

And to prey on them like this is really, truly appalling. And it's a very sophisticated crime. Some of these pages look so genuine that if you're not really aware of what's going on, it's so easy to fall for. How common is it? Well, it's a funny thing. It's cropped up really in the last three weeks. We've suddenly seen a real spike, as you said in your introduction there, in Northern Ireland. And it's something that...

I think, has been happening in Southern Ireland a little bit, but our members in Northern Ireland have been reporting a lot of it in the last two or three weeks. So it does seem to be concentrated there at the moment, but of course... There's no geographical boundaries to all this, so we're keeping a very close eye to see whether it's happening elsewhere.

Yes, and Conor and others have reported these scams to Facebook, where the fake profiles often are. Meta, which owns Facebook, says it took Conor's page down as soon as it was made aware of it, though he says it took up to 72 hours. said she had problems persuading Facebook to take the fake page down. What should social media platforms be doing about this in your opinion? Well, we've had other cases where...

These pages have been reported to Facebook and they've done absolutely nothing. One which came in to me a couple of days ago was reported by a funeral director. They said they weren't going to take the page down, but we could appeal to the oversight board, which, in Facebook's words, takes a few weeks, by which time, of course, it is far too late.

I think these social media tech companies need to understand the damaging effects that these posts have and these pages have. They need to act quicker to address them. And overall, really, they need to take these things a lot more seriously than they currently do. And what can people do who may be in this situation that someone they know has died and they seem to be asked for money or to help or for charity? How can they spot the fake ones?

Well, as I said, it's quite difficult because some of these things do look very, very genuine. I would say that really there needs to be... a collective awareness really right across the board here so i'd urge all funeral directors who are conducting a funeral where there's a live stream to find the link inform the family of what it is

Then between them and the family, post that link on as many social media sites as they possibly can and tell people who might be wanting to view a live stream only to use a link that's provided by them. Nick Britton of the National Association of Funeral Victors. Thanks very much.

Well, new rules started this month that will affect platforms which people use to sell things online, and it will affect some of the people who sell on them too. From January, companies like eBay and Vinted and others will have to record and share customer details with HMR.

It told Moneybox that's to ensure businesses operating via these platforms pay the correct amount of tax and added that if you just sell personal possessions, it shouldn't affect you. But the changes have caused confusion to many people who sell.

online like our listener Jim. I always listen to the show. I tend to buy and sell bits and bobs on vintage. Not much. Sometimes the kids go out of clothes and stuff and you pass them on. My understanding is if it's over £1,000 then they have to declare it. But I wasn't sure if that meant if you sold like one item that was over £1,000. We expected to declare that to HMRC. There is something I read called an occasional seller rule.

Whereas if you don't sell more than 30 items, it kind of doesn't count. There seems to be a lot of speculation and misinformation. Well, never any speculation or misinformation on Moneybox, I hope. Here to help the confused is Meredith McCammon. She's Technical Officer at the Low Incomes Tax Reform Group. Meredith McCammon, let's start first with what the change in reporting means.

Hi, Paul. Yeah, so from the 1st of January 2024, as you said, certain online platforms in the gig economy are going to have to start collecting information about people that sell goods and services through their... platforms and the information is going to include things like their name their national insurance number their date of birth their address and also the amount that they're making through the platform and from january next year so january 2025 they're going to send this information

to HRC on an annual basis there are some exemptions one of those Jim just mentioned is the occasional seller exemption and that's the thing I think that's causing quite a lot of confusion yeah so if you sell less than 30 items or 30 items or less and your turnover is below a certain limit, then they won't pass on the information. But what's that limit?

Yeah, so if you make less than 30 sales in a year and it's worth no more than €2,000, which is about £1,700, then the platform doesn't have to pass that information over to HMRC. But what's really important to understand is that what the platforms need to report and what individuals need to pay tax on are kind of two separate things. And the two sets of rules won't always match up exactly. No, well, they don't in this case, do they? So tell us about tax.

Jim was talking about selling things second-hand, clothes, shoes, his children and so on. From what HMRC say to us, he won't have to pay tax. That's right. If somebody's just selling kind of old possessions, clearing out their attic, their garage or selling their kind of kids clothes or toys that they no longer want, then that isn't taxable. It doesn't fall within the kind of scope of income tax because of the nature of the income.

and because the stuff is quite low value it's not counted for capital gains tax purposes so it's simply not taxable and that's the case even if the platforms report it to hmrc it's not taxable if it's over a thousand pounds the trading allowance that

mentioned it's not taxable he can basically make as many sales of his old kind of bits and bobs as he likes and it's not taxable and it won't use up the trading allowance now that's because he's not trading you mentioned the trading allowance that's a thousand pounds a year which is you you hinted is different from the reporting limit. What is that trading limit?

So if Jim was doing something else other than kind of selling his old possessions, for example, if he was buying things in specifically to resell like vintage clothes or he was making things specifically to kind of sell on like cakes, for example. then it's more like he's running a little business and the nature of the income changes. And in that situation, it's probably trading.

But this is where the trading allowance comes into play. If Jim or whoever makes less than £1,000 of income from that trading, and that's before any expenses are taken into account, then the income should be exempt under the trading allowance.

There are some complexities in how the trading allowance applies to certain categories of people, but there's lots of information on our website and lots of information to help people understand when to report their income and when they might need to pay tax on it. There is indeed. And is there a danger, though, that if you sell a lot of items and have a big turnover, even of personal possessions, briefly, is there a danger HMRC will just see those numbers and write you briefly?

I think there's a danger that they might write to you and ask you about the kind of transactions that they've seen. But it's simply a case of stating the facts, writing back to them, saying that you weren't trading. It was simply personal possessions. And that should be the end of the story. If you really are going to struggle to write that letter, Tax Aid, the charity, might be able to help you, or I'm sure we'll put a template letter up on our website at some point.

Meredith McCammon, thanks. So keep good records. And she mentioned their website, litrg.org.uk. Search Side Hustle. And this week, Moneybox Live will be all about side hustles. Felicity Hanna will be talking exclusively to Dragon's Den star and entrepreneur Deborah Meaden for her tips on starting a business. The programme will answer your questions about side hustles or turning one into a full-time job. email or record a voice note moneybox at pbc.co.uk

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We cover many of your stories on the podcast and the first step is to email us moneybox at bbc.co.uk. We do read them all. In this podcast, the team was Dan Whitworth, Sandra Hardiel, Sarah Rogers and Joe Krasner, studio manager. Our editor is Jess Quayle. I'm Paul Lewis and this was a BBC News money and work production for BBC Sounds. And now, the unmissable. The cows are mad. 30 years ago.

Britain's farms were hit by an epidemic of an infectious brain disorder. They called it mad cow disease. I'm Lucy Proctor, an In the Cows are Mad from BBC Radio 4. I tell the story of a very weird time in our history. The media started calling me the mad cow professor. Mad cow disease rampaged through Britain, first killing cows and then humans. And the thing is...

After all this time, nobody knows for sure where mad cow disease originally came from. The general feeling is that we will never know the answer. Subscribe to The Cows Are Mad on BBC Sounds. A Vivint home is a smarter home. Vivint lets you keep an eye on your kids from anywhere, so it's a smarter way to care. Because Vivint adjusts your thermostat when it knows you're out, it's a smarter way to save.

When Vivint guards your packages from Prowlers, it's a smarter way to protect. And when you can lock the doors and dim the lights for movie night with a single tap, well, that's a smarter way to live. To get the smarter home system that just gets you, go to Vivint.com or call 1-855-4-VIVINT. Live intelligently.