A report by the National Audit Office has found that the Inland Revenue paid £53m in tax credits to people who did not qualify for them, while not paying £43m to those who did merit them.
Accountancy Age, 10 Dec 2002
The public spending watchdog found that, in total, tax credit errors had risen by 40%, compared with last year, and blamed this increase on the complex administration, poor information from corporate tax returns and inadequate information technology.
Comptroller and auditor-general, Sir John Bourn, the head of the NAO, said it was vital the Revenue learn from these mistakes to minimise similar problems when new tax credits come into operation in April 2003.
The NAO also estimated that £40m in child tax credits had been wrongly paid out.
The tax credits scheme was introduced by Gordon Brown to encourage the unemployed to take low-paying jobs, but have been criticised for being too complicated to be effective.
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