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Public Accounts Committee confirms findings of audit office
HMRC have made little progress in reducing error and fraud in the tax credits system, according to a Public Accounts Committee (PAC) report that backs claims made by the National Audit Office (NAO) earlier this year.
Tax officials missed their target to reduce error and fraud to 5% by 2010/11 by a wide margin, letting £2.3bn slip between the cracks during the deadline year, £850m more than expected, states the committee’s paper, HM Revenue & Customs: Tax Credits Error and Fraud.
Its figures agree closely with those published in February by the NAO, which found that HMRC were not achieving value for money from tax credits because of a failure to manage losses effectively. The department now expects to reduce error and fraud by 2015 by only £3bn, rather than by the £8bn set in the government’s 2010 spending review.
The PAC has called on the Revenue to gain a better understanding of its performance, having not tested how effective its activities would be in combating error and fraud.
The department is advised to “improve the time it takes to produce the data it needs to monitor progress and determine actions” and to achieve a “more accurate measurement of the impact of its work and to increase the quality of its in-year tracking of claims. It should work with the Department for Work and Pensions to ensure a consistent approach to measuring error and fraud throughout the welfare system”.
There is also weakness in HMRC’s support for claimants, and in the department’s resources to deal with an increase in appeals, says the PAC report, which is based on evidence from the taxman and Citizens Advice.
