TaxAdministrationOverpaid tax credits will not be written off

Overpaid tax credits will not be written off

Government dashes hopes that billions of pounds of overpaid tax credits will be written off

Paymaster general Dawn Primarolo has made it clear in a letter to
parliamentary ombudsman Ann Abrahams that the Treasury will pursue virtually all
over-payments unless the claimant can prove they could not reasonably have been
expected to spot the error.

Almost a third of the 5.4 million means-tested allowances made in 2003-2004
contained clerical errors and the government has vowed to reclaim the £1.9bn
overpaid to 1.8 million families.

Abrahams identified the widespread overpayments in a report into the tax
credit system in June at the same time as a report from Citizens Advice found
that many of the overpaid families were being pushed into poverty when asked to
repay.

Prime minister Tony Blair apologised in parliament for the government’s
mismanagement of the tax credit system and chancellor Gordon Brown has said in
cases where HMRC is to blame for a tax credit overpayment debts are likely to be
written off.

However, in Primarolo’s response to Abrahams’ report it was made clear that
tax credit payments would only be written if the HMRC had made an error
and ‘it was not reasonable for the claimant to have spotted the error’.

Related Articles

HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

2w Emma Smith, Managing Editor
HMRC issues updated Trusts Registration Service guidance

Administration HMRC issues updated Trusts Registration Service guidance

2w Emma Smith, Managing Editor
New trading allowance: simplicity, but not as we know it

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

2m Emma Rawson, ATT Technical Officer
‘Improve rather than lose’ disincorporation relief, tax body urges

Administration ‘Improve rather than lose’ disincorporation relief, tax body urges

2m Austin Clark, Reporter
Are you ready for the Trusts Registration Service?

Administration Are you ready for the Trusts Registration Service?

3m Helen Thornley, ATT Technical Officer
Advisers bullish despite Brexit concerns

Accounting Standards Advisers bullish despite Brexit concerns

1y Fraser Simpson, Reporter
Brexit: Five questions accountants should be asking

Accounting Firms Brexit: Five questions accountants should be asking

1y Fraser Simpson, Reporter
UK votes to leave EU – accountancy profession reacts

Accounting Firms UK votes to leave EU – accountancy profession reacts

1y Fraser Simpson, Reporter