TaxPersonal TaxLobbyists slam tax credit chaos

Lobbyists slam tax credit chaos

Campaigners are pushing for the Treasury to reform the tax credit system, as overpayments total £1.8bn

The Treasury has come under renewed pressure over its administration of the
tax credit system after figures showed that overpayments of £1.8bn had been made
to almost two million families.

The Liberal Democrats demanded that paymaster general Dawn Primarolo, who
oversees the system, be sacked, and shadow chancellor George Osborne is expected
to blame Gordon Brown for the problems in a speech today.

The tax credit system has been plagued by IT glitches and has suffered heavy
criticism from parliamentary committees.

The Guardian reports that although overpayments in 2004/2005 had
fallen slightly, more claims had been made, which meant that the number of
households affected by the clawing back of overpayments had increased from 1.88
million to 1.96 million.

Almost half of these families had an annual income of less than £20,000, and
more than 500,000 owed £1,000 or more.

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