back to article Tax credit mistakes cost Joe Public £1bn a year

Fraud and error in the tax credits system is costing the UK economy at least £1bn a year, according to MPs. The Commons public accounts committee criticised HM Revenue and Customs (HMRC) for failing to establish an adequate program for overpayment reduction, with definite targets, despite frequent criticism over the losses. "The …

COMMENTS

This topic is closed for new posts.
Thumb Down

hold on..

Another govt screw up costs the public another obscene amount in taxes? Surely not, that's crazy talk, our govt would never take it's people for a ride and waste it's... ah sod it

0
0
Paris Hilton

Yet more public sector incompetence

So HMRC allowed EDS a million years to pay... nice of them - if it'd been Joe Citizen owing HMRC more than £50 they'd be taking their bit pretty damned sharpish regardless of the impact on Mr Citizen.

Paris - because her Gramps has the right idea - performance-related inheritance.

0
0
Anonymous Coward

costing the economy...

The money stays in the economy, a more accurate description would be

"keeping GBP 1 billion from the greedy fingers of tax authorities" ...

0
0

Re: costing the economy

This is true, but inefficiency in the tax system means more money spent hiring tax men to sort it out, employing IT consultants, paying spokesmen like the one at the bottom of the article to insist that everything's alright and to spout drivel about all the happy children Gordon Brown has personally saved with his tax credits, etc. As this money gets spent without creating anything useful, there is a tangible loss to the economy - maybe not £1bn, but certainly measurable in millions. Using a "progressive" tax system rather than a more equitable and efficient flat tax system results in a huge loss to the economy overall: the tax credit fiasco is merely a particularly egregious example.

Don't expect reform any time soon though. A fatcat Labour minister's reaction to being told "many claimants continue to struggle to understand tax credits and why they are overpaid" will generally be on the lines of "if they don't understand why don't they just phone their accountant or their financial advisor?"

0
0

And then there is an £80m budget shortfall for Physics and Astronomy

costing hundreds of jobs. £80m compared to £1bn... Then again the cost to pay the Police what the independent tribunal recommended would be £30m, yet the tax system looses £1bn...

Am I the only person who can see some seriously idiotic crap going on?

0
0

Margin for error??

So £65 billion over 3 years to 6 million families, that's £3611 a year for each of those families.

Of this, £6 billion has been overpaid to 6 million families over 3 years, so that's £333 mistake per family.

Their estimated margin for error was 750,000 families out of 6 million, which is 12.5%

Their actual margin of error is £333/£3611*100 = 9.2%

So unless I'm completely missing the point here, they have actually beaten their targets? The tax payers care more about money lost that # of people messed about (well, the ones who don't get tax credits do anyway).

For me, the problem is that they seem to have set their original failure limit so high - 12.5% is a long way off an accurate system, certainly for something that cost bloody millions in the first place....

Fuckwits

0
0
Black Helicopters

Department for Incompetence

Tax credits are one of the most stupid and complicated things going. A few years ago they managed to miss one digit off my income. The first I knew of it was when I went on-line to pay a credit card bill and noticed four large and unexpected payments into my bank account. Once I figured out where they came from, I called the tax credit people, which is where the income issue came in. The computer had decided that as my income was so small, it was going to pay me a big lump sum for working family tax credit arrears, plus a separate payment for that month, another big lump sum for child tax credit arrears and another payment for that month. Note that this all happened about a week before any supporting paperwork arrived in the post.

Me being naive, I expected them to just fix the error and either extract the money back or ask for a cheque for the amount and that would get everything back to normal. Oh no, nothing that simple. We went through seven mailings with revised numbers, which were duplicated to me and my wife, each with the big, friendly green explanatory booklet. At one point they were going to reduce the payments by 25% to claw back the overpayments in a gentle manner which was fine, except that it wouldn't solve the problem given the amount of the original gross error. At this point I phoned again and was reassured that it had been flagged for human attention.

The system did eventually catch up to the point of stopping all payments until the overpayment was repaid, which is fine by me because I've had a six-grand loan that won't be fully repaid for a few more years yet. Now if only they'd manage to lose the records... Sadly they haven't managed to be quite that incompetent in my case.

0
0

Tax credit mistakes cost Joe Public £1bn a year

Is that a typo in the heading? Surely it should read

Tax credit mistakes give Joe Public £1bn a year

And can you think of anyone who can spend that money any better?

0
0
Anonymous Coward

Another Brown F***up

We had a perfectly good working tax system until Brown changed it. Why am I not surprised?

0
0
Unhappy

Public Sector

Can we stop using the term public sector as it suggests Local Councils are as good as loosing vast sums of money on ICT Projects as Central Government when in fact most ( except Birmingham) see reasonable returns on their investments and actually benefit Council Tax payers.

0
0
Joke

@ Another Brown F***up

Euch.... (shivers).... what a horrible horrible nasty thought... OMG please take that image from my mind.

0
0
This topic is closed for new posts.

Forums