THE identities of thousands of rail workers have been stolen by criminal gangs and used to steal millions of pounds from the Treasury, The Times has learnt.

One in seven staff at Network Rail has been caught up in the tax credit fraud that has plunged the tax system into chaos and could turn out to be Britain’s biggest benefit scam.

Last month it emerged that 13,000 Jobcentre workers had had their identities stolen and there are fears that other leading companies have also been targeted by the gangs. Suspicions are mounting that HM Revenue and Customs insiders are involved in the fraud.

Network Rail was alerted to the problem by Revenue officials last week and a criminal investigation is now under way. John Armitt, chief executive of Network Rail, yesterday sent a letter to all 30,000 staff at the company to allay fears over the fraud and its potential impact on legitimate tax credit payments and credit ratings.

The letter, obtained by The Times, said: “ Revenue and Customs has advised Network Rail that a significant number of our employees are among the many thousands who have been affected. The key point is that it is the Government that has been defrauded, not our employees.”

By using the name, date of birth and NI number of Network Rail employees, gangs have been able to make fraudulent claims through the HMRC’s website and divert funds into their own website.

Criminals were able to claim up to £100 per month per person, usually by changing the number of children and the employment status of the person whose identity they had stolen.

The website, used by 500,000 people a year, was closed on December 2 after ministers admitted that there had been fraud. Losses already identified exceed £15 million, but that figure is expected to get much higher.

HMRC was unable to give details of how farreaching the fraud could be. A spokeswoman said: “Like any other organisation that pays out money there will be some people intent on defrauding the system and we designed tax credits with that in mind.”

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