Taxman admits to "virulent" mass ID fraud

The government has said it still does not know the full extent of the tax credits ID fraud that has so far resulted in 13,000 benefits staff having their personal details stolen and used to make false claims.

That theft of the personal details of the Department for Work and Pensions (DWP) staff has to date resulted in £15m lost in fraudulent claims and led to the online tax credits service being closed down completely on 2 December ahead of a full criminal investigation.

HM Revenue and Customs (HMRC) executive director David Varney told MPs at a Public Accounts Committee meeting this week that the online tax credits claim service had been targeted by "virulent" organised criminal gangs from the first day it was launched in 2003.

He told the MPs this latest ID fraud appears to have come from criminals using a list of staff details leaked by an insider at the DWP, which according to BBC News is from DWP payroll records from the 2003-04 financial year.

Varney also admitted other similar lists could also be in the hands of fraudsters but said HMRC is still "at a very early stage of knowing what the extent of this fraud is", according to the BBC News website.