The extent of the government's losses as a result of the ongoing tax credits fiasco may be much more severe than first thought, according to new figures published on Tuesday.
The figures show that the government overpaid GBP1.7 billion, (£1,700,000,000), in tax credits in 2005/6, bringing the grand total of overpayments since the scheme was introduced in 2004 to GBP5.7 billion.
The government is already writing off almost GBP2 billion, (£2,000,000,000) as irrecoverable. However, according to new research by the Liberal Democrat Party, an additional GBP3.6 billion has been lost through the tax credit system due to fraud, the vast majority of which is never likely to be recovered. The Lib Dems say that this brings the true total of tax credit losses to GBP9 billion,(£9,000,000,000), of which GBP5 billion will have to be written off by the government.
Piles of Money
Biggest Tax Credits Pay out Ever, and on Time!!!
Friday, 18 July 2008
Lost forever, £3bn overpaid tax credits
Lost forever, £3bn, (£3,000,000,000) overpaid tax credits.
31st May 2006, 09:09 GMT
Gordon Brown's tax credits fiasco will cost the nation £3billion, according to figures due to be released today
31st May 2006, 09:09 GMT
Gordon Brown's tax credits fiasco will cost the nation £3billion, according to figures due to be released today
£500m tax credits could be written off
£500m, (£500,000,000) tax credits could be written off
Up to £500 million in overpaid tax credits could have to be written off or even repaid by the Government because officials trying to recoup the money failed to follow correct procedures.
Osborne: 'this latest fiasco happened on Brown's watch'
Labour's flagship tax credit system has been mired in controversy since it emerged that millions of pounds had been paid in error. But in a major new setback last night, HM Revenue and Customs was forced to admit that overpayments to tens of thousands of households could have to be written off.
Up to £500 million in overpaid tax credits could have to be written off or even repaid by the Government because officials trying to recoup the money failed to follow correct procedures.
Osborne: 'this latest fiasco happened on Brown's watch'
Labour's flagship tax credit system has been mired in controversy since it emerged that millions of pounds had been paid in error. But in a major new setback last night, HM Revenue and Customs was forced to admit that overpayments to tens of thousands of households could have to be written off.
Tax Credits Explained
Tax Credits Explained
More than six million families and 600,000 workers on a low income collect tax credits, the system relaunched in 2003 by Gordon Brown to alleviate poverty. Here is a guide to the scheme.
...
History of tax credits
The original tax credit system were introduced in 1998 to encourage the unemployed back to work, with a particular focus on single mothers. In April 2003 the system was reformed with the establishment of two forms of tax credit, Working Tax Credit and Child Tax credit. Since the scheme was relaunched tax credits have become synonymous with overpayment problems.
...
History of tax credits
The original tax credit system were introduced in 1998 to encourage the unemployed back to work, with a particular focus on single mothers. In April 2003 the system was reformed with the establishment of two forms of tax credit, Working Tax Credit and Child Tax credit. Since the scheme was relaunched tax credits have become synonymous with overpayment problems.
...
Failings in the system continue. In May 2008, it was estimated that the Treasury had overpaid billions, (£1,000,000,000) of pounds in tax credits over the last four years which were unlikely to be clawed back in total by the government.
Meanwhile, low income workers and families who deserve tax credits are expected to leave billions of pounds worth of the credits unclaimed in the 2008/2009 tax year.
...
More than six million families and 600,000 workers on a low income collect tax credits, the system relaunched in 2003 by Gordon Brown to alleviate poverty. Here is a guide to the scheme.
...
History of tax credits
The original tax credit system were introduced in 1998 to encourage the unemployed back to work, with a particular focus on single mothers. In April 2003 the system was reformed with the establishment of two forms of tax credit, Working Tax Credit and Child Tax credit. Since the scheme was relaunched tax credits have become synonymous with overpayment problems.
...
History of tax credits
The original tax credit system were introduced in 1998 to encourage the unemployed back to work, with a particular focus on single mothers. In April 2003 the system was reformed with the establishment of two forms of tax credit, Working Tax Credit and Child Tax credit. Since the scheme was relaunched tax credits have become synonymous with overpayment problems.
...
Failings in the system continue. In May 2008, it was estimated that the Treasury had overpaid billions, (£1,000,000,000) of pounds in tax credits over the last four years which were unlikely to be clawed back in total by the government.
Meanwhile, low income workers and families who deserve tax credits are expected to leave billions of pounds worth of the credits unclaimed in the 2008/2009 tax year.
...
Tax credit blunders cost a billion per year
Tax credit blunders cost a billion, (£1,000,000,000) per year
The tax credits system, dogged by problems since its introduction five years ago, still pays out one billion pounds per year in wrong and fraudulent claims, a report by MPs said on Tuesday.
.....
"About two million, (2,000,000,000), families a year have been placed in debt to the government in this way since the scheme was launched," said Edward Leigh MP, chairman of the committee.
....
Incorrect payments totalled an estimated 1.04 to 1.3 billion, (£1300,000,000) pounds in 2004/05, and HMRC still has no targets in place to address the problem.
The tax credits system, dogged by problems since its introduction five years ago, still pays out one billion pounds per year in wrong and fraudulent claims, a report by MPs said on Tuesday.
.....
"About two million, (2,000,000,000), families a year have been placed in debt to the government in this way since the scheme was launched," said Edward Leigh MP, chairman of the committee.
....
Incorrect payments totalled an estimated 1.04 to 1.3 billion, (£1300,000,000) pounds in 2004/05, and HMRC still has no targets in place to address the problem.
HMRC Working out other income for your tax credits claim
HMRC
Working out other income for your tax credits claim
When we work out your tax credits payments, we look at your income for the last tax year. A tax year runs from 6 April one year to 5 April the next. As well as what you earn by working you'll have to give details of all other income over £300.
Working out other income for your tax credits claim
When we work out your tax credits payments, we look at your income for the last tax year. A tax year runs from 6 April one year to 5 April the next. As well as what you earn by working you'll have to give details of all other income over £300.
£10bn lost in tax credit mistakes
£10bn, (£10,000,000,000) lost in tax credit mistakes.
Fraud and error in the tax credit system has cost the taxpayer £10bn over just four years. The amount is enough to pay for the 2012 Olympics or equal to just over 3p on income tax.
Fraud and error: Losses blamed on tax credit system.
POLL: What's your experience of tax credits?
Millions of low-income families who have made claims have been overpaid because they have not told Revenue and Customs when their earnings have increased.
....
'The figures will serve to remind families of the huge problems this project has faced in the five years it has been running. Far too many low-income families are on a financial rollercoaster because of the enormous complexity of a system that too often gives with one hand and takes away with the other.'
Fraud and error in the tax credit system has cost the taxpayer £10bn over just four years. The amount is enough to pay for the 2012 Olympics or equal to just over 3p on income tax.
Fraud and error: Losses blamed on tax credit system.
POLL: What's your experience of tax credits?
Millions of low-income families who have made claims have been overpaid because they have not told Revenue and Customs when their earnings have increased.
....
'The figures will serve to remind families of the huge problems this project has faced in the five years it has been running. Far too many low-income families are on a financial rollercoaster because of the enormous complexity of a system that too often gives with one hand and takes away with the other.'
A total of £1.8bn was overpaid
More get tax credit overpayments
Tax credit overpayments have fallen below £2bnThe number of families given tax credit overpayments rose during the 2004/05 financial year, despite a fall in the money paid out.
A total of £1.8bn, (£1800,000,000) was overpaid in 1.96 million claims, compared to £2.2bn, (£2200,000,000) paid out in 1.88 million claims in 2003/04.
Tax credit overpayments have fallen below £2bnThe number of families given tax credit overpayments rose during the 2004/05 financial year, despite a fall in the money paid out.
A total of £1.8bn, (£1800,000,000) was overpaid in 1.96 million claims, compared to £2.2bn, (£2200,000,000) paid out in 1.88 million claims in 2003/04.
Billions of pounds have been lost in fraud and overpayment of credits since the tax credit
Billions lost in tax credit scheme. (£1,000,000,000)
The National Audit Office (NAO) has revealed that billions of pounds have been lost in fraud and overpayment of credits since the tax credit scheme was introduced in 2003. Some £13.9 billion, (£13,900,00,00), has been lost in the situation where overpayment or loss contributes to £2 billion every year, reports the Metro Newspaper.
The huge figures have prompted reaction from opposition politicians, who have called for the scheme to be abandoned. Liberal Democrat work and pensions spokeswoman Jenny Willott said:
"The amount lost is likely to keep on rising if changes are not made."Tax credits must be made simpler. We need to return fixed awards which are easy to administer."She highlighted the complexity of the tax credit system, which she said was "easily abused by fraudsters, misunderstood by claimants and mismanaged by officials".
The head of NAO has refused to give a go-ahead to the latest set of accounts but revealed a plan was in place to crack down on the errors and fraud.
The National Audit Office (NAO) has revealed that billions of pounds have been lost in fraud and overpayment of credits since the tax credit scheme was introduced in 2003. Some £13.9 billion, (£13,900,00,00), has been lost in the situation where overpayment or loss contributes to £2 billion every year, reports the Metro Newspaper.
The huge figures have prompted reaction from opposition politicians, who have called for the scheme to be abandoned. Liberal Democrat work and pensions spokeswoman Jenny Willott said:
"The amount lost is likely to keep on rising if changes are not made."Tax credits must be made simpler. We need to return fixed awards which are easy to administer."She highlighted the complexity of the tax credit system, which she said was "easily abused by fraudsters, misunderstood by claimants and mismanaged by officials".
The head of NAO has refused to give a go-ahead to the latest set of accounts but revealed a plan was in place to crack down on the errors and fraud.
House of Commons Hansard Debates for 27 Mar 2001 (pt 19)
House of Commons Hansard Debates for 27 Mar 2001 (pt 19)
However, the administration of tax credits is an increasing scandal in the tax and benefits system. In my surgery, I have to deal with more problems involving the working families ...
However, the administration of tax credits is an increasing scandal in the tax and benefits system. In my surgery, I have to deal with more problems involving the working families ...
Tax Credit chaos getting worse not better
Tax Credit chaos getting worse not better.
John Barrett, Liberal Democrat MP for Edinburgh West, today criticised the Government over the continued failure to reform tax credits after new figures revealed the full scale of fraud and error in the system.
New figures released by the HM Revenues and Customs (HMRC) and the Public Accounts Committee revealed that an estimated £1.7 billion was overpaid and £549 million was underpaid in 2005/06. The total debt in the tax credit system has reached £6 billion (£6,000,000,000) – £0.7 of which has now been written off.
John Barrett, Liberal Democrat MP for Edinburgh West, today criticised the Government over the continued failure to reform tax credits after new figures revealed the full scale of fraud and error in the system.
New figures released by the HM Revenues and Customs (HMRC) and the Public Accounts Committee revealed that an estimated £1.7 billion was overpaid and £549 million was underpaid in 2005/06. The total debt in the tax credit system has reached £6 billion (£6,000,000,000) – £0.7 of which has now been written off.
How the tax system discourages work
How the tax system discourages work
One of the great scandals of this government is how many obstacles there are to people moving up the economic ladder. The Red Book (page 62, PDF Format) reveals that more than 1.8 million,(1,800,000) people are caught in a 60 percent marginal tax rate—as they earn more they lose access to tax credits and welfare benefits and also have to pay tax on the additional income that they are earning—which is an increase of more than a million since Labour came to power. This hardly encourages people to work their way up.
Much of the blame for this falls on Gordon Brown’s absurdly complicated tax credits system. Word is that Stephen Byers plans to raise this in the Budget debate this afternoon.
One of the great scandals of this government is how many obstacles there are to people moving up the economic ladder. The Red Book (page 62, PDF Format) reveals that more than 1.8 million,(1,800,000) people are caught in a 60 percent marginal tax rate—as they earn more they lose access to tax credits and welfare benefits and also have to pay tax on the additional income that they are earning—which is an increase of more than a million since Labour came to power. This hardly encourages people to work their way up.
Much of the blame for this falls on Gordon Brown’s absurdly complicated tax credits system. Word is that Stephen Byers plans to raise this in the Budget debate this afternoon.
Tax Credits Project in Scotland
Tax Credits Project in Scotland
This project aims to contribute to a reduction in the number of families living in poverty by maximizing the potential income available to them through the tax credit system
This project aims to contribute to a reduction in the number of families living in poverty by maximizing the potential income available to them through the tax credit system
Tax Credits By The Maternity Alliance
Tax Credits By The Maternity Alliance
Who can claim and what for - The Maternity Alliance takes you through the benefits maze
Who can claim and what for - The Maternity Alliance takes you through the benefits maze
Totally unacceptable scandal
The Tories urged the government to take action on the “totally unacceptable scandal” of error and fraud in the tax credits system.
George Osborne, the shadow chancellor said that in 2005-06 the Inland Revenue overpaid £1.7bn, (£1700,000,000) to claimants and underpaid £549m,(£549.000.000).
“That’s well over £2bn in mistaken payments that bring hardship to many hundreds of thousands of families and cost the taxpayer dearly.”
George Osborne, the shadow chancellor said that in 2005-06 the Inland Revenue overpaid £1.7bn, (£1700,000,000) to claimants and underpaid £549m,(£549.000.000).
“That’s well over £2bn in mistaken payments that bring hardship to many hundreds of thousands of families and cost the taxpayer dearly.”
£1bn a year 'will always be wasted over tax credits'
£1bn a year 'will always be wasted over tax credits', £1,000,000,000
More than £1billion will be wasted on tax credits every year, the Government has admitted.
The Inland Revenue has already written off £3billion of taxpayers' money handed to families by mistake in the past three years.
More than £1billion will be wasted on tax credits every year, the Government has admitted.
The Inland Revenue has already written off £3billion of taxpayers' money handed to families by mistake in the past three years.
EDS settles Tax Credits claim for £71m
EDS settles Tax Credits claim for £71m, £71,000,000
HM Revenue & Customs this week accepted £71.25m from Electronic Data Systems (EDS) to settle its claim for compensation for the problems caused by EDS's computerised Tax Credit administration system.
Paymaster general Dawn Primarolo announced the settlement in a written statement issued to Parliament on Tuesday, which added: "Details of the settlement are commercially sensitive and therefore bound by a legal confidentiality agreement as is normal in agreements of this nature."
When the new credits were introduced in 2003, thousands of claimants were left without payments because of flaws within the computerised processing system. According to
Parliamentary ombudsman Ann Abrahams, "systematic maladministration" resulted in difficulties for 1.9m families.
HM Revenue & Customs this week accepted £71.25m from Electronic Data Systems (EDS) to settle its claim for compensation for the problems caused by EDS's computerised Tax Credit administration system.
Paymaster general Dawn Primarolo announced the settlement in a written statement issued to Parliament on Tuesday, which added: "Details of the settlement are commercially sensitive and therefore bound by a legal confidentiality agreement as is normal in agreements of this nature."
When the new credits were introduced in 2003, thousands of claimants were left without payments because of flaws within the computerised processing system. According to
Parliamentary ombudsman Ann Abrahams, "systematic maladministration" resulted in difficulties for 1.9m families.
Brown’s ‘incompetence’ over tax credits has cost the public £2bn
Brown’s ‘incompetence’ over tax credits has cost the public £2bn, £2,000,000,000
Gordon Brown was accused last night of presiding over incompetence on “an industrial scale” as a damning report found that his tax credits system had cost the public almost £2 billion through overpayments, errors and fraud.
Gordon Brown was accused last night of presiding over incompetence on “an industrial scale” as a damning report found that his tax credits system had cost the public almost £2 billion through overpayments, errors and fraud.
£5bn tax credits write-off looms
£5bn tax credits write-off looms. £5,000.000.000
Gordon Brown's 'shambolic' tax credits scheme has cost the taxpayer more than £5bn, new figures will show today.
GORDON BROWN: Tax credits were his flagship scheme
In the four years since the policy was introduced, the Government has already written off more than £2bn in overpayments.
At the same time the amount lost to fraud and error rose to £3bn last year. The Treasury is considering also writing off those losses, despite the cost to the public purse
Tax credits fiasco cost £6bn Working and Child Tax credits and Child Benefit Tax credits and allowances
Gordon Brown's 'shambolic' tax credits scheme has cost the taxpayer more than £5bn, new figures will show today.
GORDON BROWN: Tax credits were his flagship scheme
In the four years since the policy was introduced, the Government has already written off more than £2bn in overpayments.
At the same time the amount lost to fraud and error rose to £3bn last year. The Treasury is considering also writing off those losses, despite the cost to the public purse
Tax credits fiasco cost £6bn Working and Child Tax credits and Child Benefit Tax credits and allowances
Overhaul tax credits or miss key child poverty targets
Overhaul tax credits or miss key child poverty targets, Brown told.
· Citizens Advice calls for a 'radical rethink' of system· Almost half of tax credit payments were incorrect
Gordon Brown will miss crucial child poverty targets unless he signals, in his pre-budget report tomorrow, a complete overhaul of the troubled £14bn tax credits system, leading anti-poverty campaigners have warned the chancellor
.
In 2004-05, almost half of all payments were incorrect. Of the nearly 6.5 million families receiving them, almost 2 million were overpaid and then forced to pay the money back, while more than 900,000 were underpaid.
· Citizens Advice calls for a 'radical rethink' of system· Almost half of tax credit payments were incorrect
Gordon Brown will miss crucial child poverty targets unless he signals, in his pre-budget report tomorrow, a complete overhaul of the troubled £14bn tax credits system, leading anti-poverty campaigners have warned the chancellor
.
In 2004-05, almost half of all payments were incorrect. Of the nearly 6.5 million families receiving them, almost 2 million were overpaid and then forced to pay the money back, while more than 900,000 were underpaid.
Oral Answers to Questions — Treasury
House of Commons debates Thursday, 29 March 2007
Oral Answers to Questions — Treasury Tax Credits
Oral Answers to Questions — Treasury Tax Credits
Scandal as tax credits hit poor - The Star
TENS of thousands of hard-pressed South Yorkshire families were overpaid hundreds of pounds in tax credits for the third year running, says the Government.
New Treasury figures revealed 47,700 local families were overpaid £38.1m in 2005/06 - equivalent to £798 per family. The overpayments, which have beset the scheme since its introduction in 2003, are blamed for plunging the poorest households into financial crisis.
New Treasury figures revealed 47,700 local families were overpaid £38.1m in 2005/06 - equivalent to £798 per family. The overpayments, which have beset the scheme since its introduction in 2003, are blamed for plunging the poorest households into financial crisis.
New look Revenue/Customs saves cash
New look Revenue/Customs saves cash, just what impact will this have on those still waiting to resolve their Tax Credits??
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