TaxPersonal TaxNAO qualifies HMRC again on tax credits

NAO qualifies HMRC again on tax credits

Tax credit fiasco sees comptroller general qualify HMRC report

The National Audit Office
has qualified the Trust Statement issued by HM Revenue & Customs for
2006/2007 because of problems with the tax credit system, and also noted serious
glitches in collecting tax paid through PAYE.

The NAO was able to issue an unqualified opinion on the Trust Statement of
revenues, but as was the case in 2005/2006
comptroller
gen
eral
Sir John Bourn qualified the opinion on ‘regularity’ due to
levels of ‘claimant error’ and ‘fraud in the tax credit system’.

On the issue of tax credits the NAO said that overpayments of the credits had
caused debts of £6bn. The NAO also criticised HMRC for making incorrect payments
of £40m in cases of suspected fraud, even though it had already closed its tax
credit website following attacks from organised criminals.

HMRC also took flak for paying out between £1bn and £1.3bn to claimants who
were not eligible for tax credits. The NAO said there was ‘no evidence to
demonstrate a lower estimate for 2006-07’.

With regards to PAYE, the NAO said HMRC’s computer systems ‘were no longer
well suited to the efficient administration of income tax’ and said that the
department was failing to pursue £880m of tax every year.

This, coupled with the fact that taxpayers are likely to have overpaid tax by
£340m, meant that 5 million people were paying the incorrect sum of tax.

Further reading:

£6bn overpaid to tax credit claimants since 2003

Related Articles

LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

4d Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

2w Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

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

2m Alia Shoaib, Reporter
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
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

4m Alia Shoaib, Reporter
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

4m 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

5m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

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

5m Alia Shoaib, Reporter