Error-prone HMRC WRONGLY hands out £1.6 BILLION of your money to fraudsters
ALMOST £1.6 billion of tax credits have been accidentally paid out in just one year by HMRC, due to an astonishing rise in benefit fraud and errors by the tax office.
The National Audit Office watchdog has warned the problem is set to get worse as hundreds of thousands of people are moved from tax credits to a new Universal Credit system.
Figures in HMRC’s annual report revealed an estimated £1.57 billion in overpayments was made as a result of errors and fraud in the 2015/16 tax year.
This figure is almost 15 per cent up from the £1.37 billion of overpayments in the previous 12 months.
It is also the first time since 2012/13 that HMRC missed its target of ensuring the amount overpaid due to fraud or error was less than five per cent of the total amount paid in tax credits.
Around 4.4 million families across the UK claim working tax credits or child tax credits as a way to top up their income.
The National Audit Office said: “HMRC’s estimated increase in error and fraud within tax credits is contrary to the significant reductions achieved in previous years, and the rate is expected to increase further.”
HMRC sacked American firm Concentrix last October following complaints that 45,000 people had wrongly had their benefits removed.
This has since resulted in HMRC staff having to counter fraud themselves.
Tougher rules designed to stop bogus benefit claims have instead pushed up fraud figures.
Around the time of Concentrix being removed, MPs on the Commons’ Work and Pensions committee accused HMRC of hounding innocent workers on benefits while allowing rich tax dodgers to continue to flout the rules.
Lib Dem MP Jamie Stone said: “People will be shocked to see that while their local schools and hospitals are facing cuts, almost £1.6 billion of taxpayers’ cash has been paid out due to fraud or error.
“Meanwhile, some people are still not receiving the payments they deserve. The Government needs to get a grip.”
Frank Field, Labour MP and former chairman of the committee, said: “We need to safeguard taxpayers’ money.”
HMRC said it raised a record £574.9 billion in tax in 2016/17 - up 7.1 per cent on the previous year.
A record £28.9 billion was clawed back from businesses and individuals that failed to pay the amount of tax due.
But the amount HMRC was forced to pay back after losing court battles with firms and individuals rose to £7.8 billion in 2016/17 from £5.9billion.
The average waiting time to speak to its call centre staff fell from 12 minutes to under four minutes - although these waiting times do not include time spent listening to an automated message.
In 2015/16, HMRC was forced to hire 800 staff following a meltdown in customer services that meant taxpayers were forced to wait on hold for an average of 47 minutes.
An HMRC spokesman said: “We are working hard to make it as easy as possible for tax credits customers to keep their claims up-to-date so they receive the correct amount of money.”
(References- Express https://apple.news/A6RxXSwnoOAuDkOSJQtvlxQ)