HMRC’s approach queried as claimants’ errors rise

The government should explain the reasons behind a spike in tax credit errors after official figures found inaccuracies by claimants had risen by more than one-third in a year said the Low Incomes Tax Reform Group.

HMRC’s child and working tax credits annual error and fraud statistics for 2015-16 show £1.2bn in tax credit payments were paid because of errors by claimants that led to them receiving more than they were entitled to. At 4.2% of the overall tax credit budget of £28.3bn this represented an increase of 35% on the 3.1% recorded in 2014-15.

LITRG warned that flawed practice by HMRC in assessing the 4 000 sample cases used to compile the statistics would not provide an accurate picture of the true extent or causes of error arising in the tax credit system and would lessen the chances of remedy.

HMRC should engage directly with claimants to...