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.
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"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 ...
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