TaxPersonal TaxTax credit bungle due to HMRC errors

Tax credit bungle due to HMRC errors

Tax credit victims have used evidence from their own case files as well as information obtained under data protection laws to prove HMRC was at fault

HM Revenue & Customs is preparing to write off £2.8bn as a result of
bungling of tax credit payments.

More than 1.5m people have been told they have been overpaid tax credits due
to their own error, that they have to pay this back and that they do not have a
right to appeal.

But the shocking claims from HMRC have been challenged by several victims,
who proved that HMRC was at fault after using evidence from their own case files
as well as information obtained under data protection laws.

Tax credit recipients obtained confidential tapes and internal documents to
prove bullying and bungling by staff responsible for the tax-credit scheme.

Officials’ errors that were uncovered indicated offices that were in
disarray, with random errors inserted by computers into claimants files, the
Sunday
Times
reported.

Officials also misled claimants into believing they had no right to appeal.

The evidence uncovered showed:

* HMRC computers routinely deleted claimants’ salaries, thus triggering
overpayments. A claimant who had tax-credit debts was told: ‘The computer zeroed
your wife’s salary. It’s a common fault.’

* Duplicate rogue files caused errors and sent out multiple payments. One
claimant was sent 10 letters in one day – but was still assured there were no
payment mistakes. He was also threatened with legal action because of the
overpayments.

* Letters were sent to the victims claiming they had ‘no right of appeal’
when they were pursued for overpayments caused by official error. A woman with
two children said she had taken out a £7,500 loan to repay the tax credits after
receiving one of the letters.

Public accounts committee Tory MP, Richard Bacon, said: ‘This is
unbelievable. It shows no matter how many times claimants gave accurate
information, officials still managed to screw it up.’

Further reading:

Bullying
tax officials lose £2.8 billion

Related Articles

HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

6d Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

1w Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

2m Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

3m Emma Smith, Managing Editor
Rangers tax case to have ‘dramatic’ consequences for football and business

Legal Rangers tax case to have ‘dramatic’ consequences for football and business

3m Emma Smith, Managing Editor
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

3m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

3m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

3m Alia Shoaib, Reporter