The government has admitted that criminals stole £2.7m when its online tax credits application portal was defrauded.

HM Revenue & Customs (HMRC) paymaster general Dawn Primarolo said last week that criminals stole the identities of 8,800 Department for Work and Pensions employees during 2003-04. Some 6,800 of these identities were then used to try to defraud the tax credits web site last autumn, but 4,100 of these were detected and blocked before payment was made.

‘Of the remaining 2,700 claims where tax credit payments were made into multiple bank accounts, using the stolen identities, payments were suspended immediately they were discovered,’ said Primarolo in a written parliamentary answer.

By closing the web site on 16 December, and working with National Criminal Intelligence Service to investigate the fraud, HMRC says it prevented even higher losses (Computing, 19 January).

Network Rail revealed last week that a significant number of its employees have had their identities stolen by criminals looking to defraud the HMRC tax credit portal. Some reports say more than 4,000 Network Rail staff were affected.

‘Network Rail has been contacted by HM Revenue & Customs to inform us that they are investigating the fraudulent use of the personal details of a significant number of Network Rail employees for the purposes of claiming tax credits from the government,’ said Network Rail, which is working with HMRC to carry out an investigation into the security breach.