Tax Credit problem hits Solihull

12.00.00am UTC (GMT +0000) Wed 1st Jun 2005

THOUSANDS OF SOLIHULL FAMILIES REPAYING £6M OF TAX CREDITS - LORELY BURT MP

Lorely Burt MP for Solihull constituency, today slammed the Government over the administration of the tax credit system, following astonishing figures published on the number of over payments made by HM Revenue and Customs. In total, a third of all awards for 2003/04 over payments overpayments, leaving nearly 2 million families repaying on average more than £1000 each.

In Solihull constituency alone, of the 18,400 tax credit claims over payments,900 were overpayments, with the average family paying back £1017 each.

Commenting on the figures, Lorely Burt said:

"These figures are unprecedented and reflect the serious problems not only with the computer system, but inherent within the new tax credit system.

"I have already received letters from constituents concerned about this issue. There are many local cases where the tax credit office has attempted to claw back money that had often been overpaid as a result of internal administrative error rather than customer misinformation.

"Too many families are having their budgets thrown into chaos by the tax credit office causing serious problems and hardship especially for those on low incomes.

"What we do not yet know, however, is how over payments of these overpayments were a result of official error and how many the Revenue will write off.

"Last week Treasury Ministers signalled over payments to the way overpayments are clawed back. The statement was an implicit admission that the Revenue have not been acting responsibly in the past. But new guidance alone will not solve this problem.

"The policy of reassessing income at the end of the award is flawed and a return to a system of fixed awards would end this bureaucratic nightmare for many families."