MPs fifth report since the tax credit system started in 2003 reveals almost two million families a year are still being placed in debt by tax credit overpayments.

HM Revenue & Customs (HMRC) has established no targets to cut losses as a result of fraud or errors. However, HMRC said recent changes had led to big improvements, BBC News reports.

‘This report relies on data captured only up to 2006,’ an HMRC spokesman, said. ‘Overpayments have fallen by a fifth and accuracy in processing payments has reached 97%. HMRC's security measures stopped the vast majority of fraudulent claims before any money was paid out.’

Despite the repeated public commitments from government ministers to improve matters, the MPs believe that there is very little evidence of things getting better. ‘The tax credits situation is as serious as ever,’ Edward Leigh MP, committee's chairman, said. ‘HMRC's attempts to bring the system under any measure of control have so far not been crowned with conspicuous success.
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