Beating the backlog

ANDREW GOODALL examines how HMRC have been dealing with tax credits overpayments.

A REPORT BY the Child Poverty Action Group (see Taxation 9 September 2004) concluded in June 2004 that the potential for large underpayments or overpayments of tax credits was 'inherent' in the annualised system of assessing entitlement. The damaging consequences of this structural flaw in the system whose victims have been the very people that the tax credits are supposed to help have been well documented in recent reports published by the Citizens' Advice Bureaux the Adjudicator and the Parliamentary Ombudsman.
This article summarises the statutory framework and the practice of HM Revenue and Customs (HMRC) in relation to the overpayments and focuses on the Parliamentary Ombudsman's report Tax credits: putting things right (which was published on 22 June 2005 and which is available on the Internet at www.ombudsman.org.uk) and HMRC's new...