As seen in all the media the past few days there has been an issue with a new computer system at HM Revenue and Customs. This has caused a backlog of approx 18 million tax errors for those on the PAYE scheme.

Some lucky people will get a tax refund. Others will be less fortunate and receive a demand for more money for under paying tax. On average approx £1400 each.

Now I am in no place to advise on tax issues, if you do receive a demand I suggest you consult a reputable tax consultant. However I am going to explain a little about security and the fraudulant sites that appear when there are potential refunds about. I will also aim to you show how easy it can be to lose your identity.

How many of you have received an email supposedly from HMRC saying you are entitled to a refund of £336? It usually says click here and give us 3- 5 days to deal with your refund.

Other emails might show a logo of your bank saying click here and add your details, we will then quickly pay you the money back.

These types of emails are worrying, firstly they look genuine and seem to be coming from a valid HMRC address. Secondly they are asking you for details of your bank.

Now HMRC will only communicate with you via letter, yes its old fashioned, BUT how would they know your email address, but they do know your land address. Why would they ask for your bank details? If you filled in a self assessment form and are entitled to a refund they will give you a choice of a cheque or a bank transfer.

What could happen if you click or fill in any details?

A number of possible things could happen.

1. The best thing and that is nothing; there is a fault with the email. It happens.

2. Nothing appears to happen but some malicious code has been added to your machine. This becomes part of a hackers network and everytime you use your machine they can get access to your details, passwords, bank accounts, passwords etc without you knowing.

3. You are taken to a very genuine looking HMRC page. You enter all your details as it looks genuine enough and press submit. You have just given all your details to a criminal, who now has your identity.

For me No 3 is the most worrying. It is called identity theft and this means the criminal can become you. Open accounts, create debt in your name, sully your reputation and in extreme cases cause you to be arrested for serious crimes. A case happened in 2008 when a businessman was wrongly arrested for downloading child pornography - all traced back to his stolen credit card number. Luckily for him he could prove he was innocent; however this caused him huge distress and his reputation was destroyed.

So you are sensible and do not click on emails; however what about your waste and office rubbish?

Every piece of mail has information about you on it. The address label, the invoice enclosed, your bills etc etc.

Every piece of information can be used to build your identity over a period of time. These criminals are not in a hurry.

If you want further information contact Wardour Secure Networks in Grantham

In part 2 we can look at the simple ways we can combat identity theft.