LITRG attacks 'unhelpful' policy paper

A new policy document co-authored by HMRC has been criticised by the Low Incomes Tax Reform Group (LITRG) as confusing and unhelpful.

Tackling Fraud and Error in the Benefits and Tax Credits Systems has been jointly issued by the Revenue and the Department for Work and Pensions (DWP), in an attempt to send a strong message that deception and mistakes will no longer be tolerated where welfare benefits are concerned, whichever government department is involved in their administration.

The LITRG, a registered charity, derided the paper as ‘breathtaking in its lack of recognition that error and fraud are two quite different concepts, and in playing down the responsibility of both government departments for official error.

‘It is unhelpful to join together two concepts in one document. Fraud, as a matter of law, requires a guilty intent; error, whether committed by claimant or official, can be careless or it can be wholly innocent,’ said the group.

‘They are very different in origin, and they need very different solutions. To talk about them in tandem not only confuses the general audience, but also potentially encourages staff members in government departments to conflate the two.’

The LITRG went on to highlight the ‘highly complex’ tax system, which through ‘unintelligible forms’ and ‘inadequate or no explanation of difficult parts of the law’ can lead to ‘simple, innocent error’ by individuals.

The charity also insisted that HMRC and the DWP are ‘major contributors to error’ and ‘to penalise a claimant for doing what they were wrongly advised to do by a government employee would be harsh indeed’.

The policy document’s section on the tax credit system was highlighted for special criticism, with the LITRG saying, ‘We find it incredible that… HMRC assert there is no official error in the tax credits system. What they mean is that the system they built is incapable of identifying error.

‘To our certain knowledge, billions of pounds have been written off since the commencement of the tax credits regime solely because of acknowledged contributory Revenue error.

‘HMRC and the DWP need to put their own houses in order before shouting about the deficiencies of those who need their help.’

Issue Extract

tacklingfraudanderror.pdf

Issue: 4277 / Categories: News , Department for Work and Pensions , DWP , LITRG , Low Incomes Tax Reform Group , Tackling Fraud and Error , tax credits , Admin