Red tape fears for business after NAO plea

Speaking at a Public Accounts Committee meeting this week, the head of the National Audit Office said he would be failing in his duty to parliament if he were not allowed access to companies that paid tax credits to their employees.

Claiming that tax credits were a form of social security, and therefore public money, comptroller and auditor general Sir John Bourn said: ‘We have access to the books and records of the government departments, but do not have access to those that pay the benefits.’

According to the latest figures, employers now handle £1.4bn in tax credits which replace some social security benefits, but Edward Leigh MP, chairman of the PAC, said despite reassurances, it was difficult to be certain that the system was working.

Paymaster general Dawn Primarolo recently told the PAC access would be ‘inappropriate in view of sensitivities about burdens on business’.

Instead, Primarolo said the NAO should rely on the Inland Revenue for assurances that employers were handling the tax credit system satisfactorily. But Leigh has now reopened the battle for NAO access.

Denying it would be an added burden for companies, Leigh said: ‘This is not an attack on employers, more an attack on the Inland Revenue – the NAO needs to be able to double check on the Inland Revenue to make sure we have the right systems in place.’

A spokesman for the Inland Revenue said: ‘We want to minimise the burden on employers, and will be meeting with the comptroller and auditor general to provide him with the assurances he seeks.’

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