Magazine article Public Finance

R&C's £5.8Bn Overpayments Slammed by MPs

Magazine article Public Finance

R&C's £5.8Bn Overpayments Slammed by MPs

Article excerpt

Revenue & Customs seems unable to cope with £5.8bn of overpayments made under its tax credits system, according to the Commons Public Accounts Committee.

Tax credits suffer from the highest rates of error and fraud in government,' PAC chair Edward Leigh said. 'R&C seems incapable of mounting a credible and effective response to the flood of money being wasted in this way.

Leigh was speaking on May 9 as the PAC published its fourth report on the tax credit system since its introduction in 2003. The committee found that while £47bn was paid out to low income families in the first three years of the system, £5.8bn - or 12% - of this was in overpayments.

Overpayments often result because credits are based on a claimant's financial circumstances and employment the year before. R&C seeks to recover these, but has so far written off £500m and expects to write offa further £1.4bn - equivalent to around 4% of its payouts so far. …

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