The Children’s tax credit takes effect from April this year, and is expected to rise to Pounds 10 from Pounds 8.50 in next month’s Budget, but more than a million families entitled to claim have yet to apply.
Steve Webb, social security spokesman for the Liberal Democrats, criticised the Treasury’s decision to use the Inland Revenue to inform parents of their new rights.
The Revenue wrongly sent out one million letters to families who were ineligible to the rebate, inviting them to claim the tax credit, while many of those who are eligible have not received letters.
Last month, the Revenue estimated five million people qualified for the tax credit, but said it had only received 2.8 million applications.
Webb told the House of Commons: ‘The government announced its plans to bring in this new credit nearly two years ago, yet they have still failed to find over a million families.’
Webb said the government could have found every child entitled to the saving if it had wanted to.
‘This bureaucratic nightmare means millions of families may miss out on the money they are entitled to. Labour’s pre-election tax bribe strategy is in tatters, ‘ he added.
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