Feeds

Failed tax system still causing grief

More help needed for vulnerable

Beginner's guide to SSL certificates

The Public Accounts Committee has found the government's tax system overpaid tax credits by £7.3bn in the first four years of the scheme and is still clocking up £1bn a year in overpayments.

Her Majesty's Revenue and Customs is trying to recover some £4.3bn of that from some of the most vulnerable families in the country. Delays in moving over to its new National Insurance Recording System mean that the backlog of 16m cases which need clerical checking is likely to increase.

Edward Leigh, chairman of the PAC, said: "HMRC should be more sensitive in how it deals with the recovery of overpayments. The Department is only now starting to introduce measures to support claimants, including helping them navigate the complex tax credit procedures."

The existing PAYE system was designed in the 1980s on the assumption that most people would continue to work for one employer. The new system is based on individuals rather than employers.

The tax credit system was designed for some overpayment to occur because it uses provisional data to make the payments at the beginning of the year. A final assessment at year end is based on actual circumstances. But the scale of these over-payments concerned the committee.

It leaves the poorest families in the country having to pay, on average, £770 a year back to the Revenue. The problems caused have left thousands of families in fear of having to pay back credits they have received.

Changes made in 2005 have helped the Revenue reduce overpayments from £1.9bn a year to £1bn.

Fraud and error are also an issue - HMRC lost between £1.31bn and £1.54bn in 2006 to 2007.

The system was provided by EDS between 1994 and 2004 when HMRC sacked them and gave the work to CapGemini. Both sides blamed the other for the failure of the project.

The full report is available as from here (pdf). ®

Protecting against web application threats using SSL

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.