Feeds

IT to fight tax credit fraud

But is it too little too late?

Secure remote control for conventional and virtual desktops

HM Revenue and Customs (HMRC) has said that improvements including new technology will help tackle continuing problems with the tax credit system.

The department was responding to a report on revised fraud and error estimates for child tax credit and working tax credit, published on 11 July 2006. The document shows that public funds are drained of some £1.7bn each year due to fraud, error and overpayment.

It also shows the huge scale of organised tax credit fraud, with fraudsters cheating the system out of more than £130m last year alone by making false claims.

To tackle the problem, HMRC said it is making "significant improvements" to IT systems. According to the department, major software releases were successfully implemented in November 2005 and April 2006, delivering improvements in back office processes and services to claimants.

It said the result has been a reduction in errors and that the indicative figures for accuracy in processing and calculating awards was 98.3 per cent in 2005-06, up from 78.6 per cent in 2003-04.

Work is underway to make the tax credits e-portal more secure and to reopen it. The portal was closed in November 2005 after it was suspected that organised identity fraud was taking place. A Department of Work and Pensions portal used by staff at Jobcentre Plus to send tax credit applications direct to HMRC on their claimants' behalf has been reinstated.

The remedies appear to be too little too late for opposition politicians. Conservative shadow paymaster general Mark Francois said the system was in "meltdown" and laid the blame at the door of chancellor Gordon Brown.

"It is embarrassing beyond belief that the Treasury has failed to control fraud and error in a system which Mr Brown introduced," said Francois.

David Laws, the Liberal Democrat shadow work and pensions secretary, accused the government of an attempted cover up. "The government is well aware that these new figures on tax credit fraud and error are not going to be favourable and is determined to draw attention away from them on a busy news day," he said.

Child tax credit and working tax credit were introduced in 2003 to tackle child poverty and encourage more people into work. They replaced earlier forms of tax credit.

Computer systems, originally supplied by EDS and now run by Capgemini, failed to perform well from the start. In January 2006, a report from Parliament's Public Administration Committee criticised the scheme for its lack of "customer support".

Yesterday, paymaster general Dawn Primarolo was keen to emphasise the benefits of tax credits by highlighting the fact that they now support nearly 20m people, including 6m families.

"Tax credits take-up is at unprecedented levels, with 93 per cent of families on incomes below £10,000 claiming their entitlement to child tax credit, compared to 57 per cent take-up in the first year of family credit," she said.

"Tax credits have improved work incentives, reduced the tax burden on low to middle income families and helped to dramatically reduce child poverty."

This article was originally published at Kablenet.

Kablenet's GC weekly is a free email newsletter covering the latest news and analysis of public sector technology. To register click here.

Secure remote control for conventional and virtual desktops

More from The Register

next story
Britain's housing crisis: What are we going to do about it?
Rent control: Better than bombs at destroying housing
Top beak: UK privacy law may be reconsidered because of social media
Rise of Twitter etc creates 'enormous challenges'
GCHQ protesters stick it to British spooks ... by drinking urine
Activists told NOT to snap pics of staff at the concrete doughnut
What do you mean, I have to POST a PHYSICAL CHEQUE to get my gun licence?
Stop bitching about firearms fees - we need computerisation
Ex US cybersecurity czar guilty in child sex abuse website case
Health and Human Services IT security chief headed online to share vile images
We need less U.S. in our WWW – Euro digital chief Steelie Neelie
EC moves to shift status quo at Internet Governance Forum
Oz biz regulator discovers shared servers in EPIC FACEPALM
'Not aware' that one IP can hold more than one Website
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.