Tax credit mess hits Revenue’s credibility
The Inland Revenue has mismanaged the implementation of the new tax credit system to the tune of £700 million-a-year, according to the Government’s spending watchdog.
The National Audit Office said the Revenue had overpaid many people claiming working families’ and disabled persons’ tax credits.
As an explanation, the NAO said many claimants had failed to note their partner’s income on their application forms.
The head of the NAO, Sir John Bourn, said overpayments were “unacceptably high.”
Overpayments have been running at between £510-710 million a year (10-14 per cent), the NAO found.
The NAO said computers glitches, which emerged when the new system was introduced last April, had delayed pay-outs of child and working tax credits, rendering many families unable to pay utility bills.
Chairman of the Commons Public Accounts Committee, Edward Leigh, said the Revenue’s “credibility” had been hit as a result.
He said the Revenue had wasted £2 billion of taxpayers’ money in overpaid tax credits.
