David Varney, the head of HMRC, came in for heavy criticism from MPs
yesterday over the handling of tax credits.
Members of a Commons Treasury sub-committee accused HMRC of ‘alarming
complacency’ in its handling of the tax credits system, which a parliamentary
watchdog said was blighted by fraud an error, The Guardian reports.
The tax credits scheme was launched in 2003 and aimed at luring low-income
families on benefits into work. HMRC, however, has struggled to implement the
system effectively. Thousands of families have been forced to pay back cash
mistakenly paid to them. The department has written off £123m of overpayments
and classified a further £961m as ‘doubtful debts’.
At the hearing Varney, the HMRC chairman, defended criticism of the
over-payments as ‘a part and feature of the system’ and that an expectation of
overpayments was built into the system.
MPs, however, said this smacked of incompetence and poor management.
‘This is an incompetent system and an incompetent management approach,’ John
McFall, MP for West Dunbartonshire said to Varney.
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