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Last Updated: Monday, 27 June, 2005, 10:08 GMT 11:08 UK
Should overpaid tax credits be repaid?
Have you faced difficulties with the government's tax credit system?

Prime Minister Tony Blair has apologised after stinging criticism of the government's flagship tax credits.

Citizens' Advice say that a third of recipient families have been overpaid with many forced into poverty when HM Revenue & Customs takes back overpayments.

And a report by the Parliamentary Ombudsman has also accused Paymaster General Dawn Primarolo of failing to give a clear picture of the problem to MPs.

Have you had problems with the tax credit system? Should overpaid credits be repaid?

This debate is now closed. Read a selection of your comments below.

The following comments reflect the balance of opinion we have received so far:

This topic was suggested by David, UK:
I would like some discussion on the problems with the tax credits system

The tax credit office lost my renewed claim pack when I sent it and I spent 6 months trying to get it rectified. In the meantime they sent me threatening letters demanding to pay back all money. They still haven't paid me the entitlement for last year. The system is a total chaos.
Jason, Warwick, UK

I recently got separated and was honest enough to report my change of circumstances to the HMRC. On the click of a mouse, they cut all my tax credits at a time when I needed them most. I now have to re-apply for WFTC and they still have to send me some forms - it's now a week since talking to them. They can not even give me an estimate of their processing time. The HMRC lacks flexibility and common sense in deed!
Raymond, London

The tax credit fiasco is yet another in a long line of Government initiated I.T. system failures, for which we all have to pay for. When will these so called 'experts' get their houses in order? God help us all when the proposed ID card system gets under way.
Don Hancock, Kenilworth, Warwickshire

I have always found the system works very well. The form filling for the previous year's income was a bit of a hassle and I couldn't understand it at first. I later realised that as soon as I received the reward notice, I had to contact them to update them with present income payments/childcare expenses and I have since never had a problem. Going pretty well I would say!!
Mandy, Leeds, West Yorkshire

Isn't it time we had a coherent system and coherent government?
R. Evans, Cardiff, Wales
I filed my tax credit return online last year and they swapped my employment details with my wife. This year I've tried filing it online again - the system crashed 3 times before finally letting me in. I don't understand why there's so many forms to fill in - Self Assessment, Child Benefit and Tax Credits - isn't it time we had a coherent system and coherent government?
R. Evans, Cardiff, Wales

We complied with all the Revenue instructions and forms and they were told about changes as they happened. When we got the award we checked all the figures they had used and found them to be correct so when they said we'd been overpaid by 1700+ we were amazed. If the wrong figures were used we could have understood it but they used correct figures and still got it wrong. We appealed against having to repay it and after 6 months they agreed to write it off as a Revenue error. Sounds to me as though there is a fault in the computations on the computer program?
Mark, Norwich

Why doesn't the government seriously consider or even look at the Flat Tax revolution that is currently sweeping countries in parts of Europe. Under these Tax Regimes anyone on benefits are removed from the tax paying system completely and a flat rate for tax is agreed to meet all government spending. This is equally spread out amongst the working population. OK, this would mean that the stock broker pays the same as a labourer but it allows the government to collect more tax receipts. If you couple this with removing the expensive bureaucracy required to administer Tax Credits then the results will be remarkable. The Government will be able to raise more money and would be better placed to help the poorest in society.
Jason Mead, Bristol

The lack of simplicity and transparency of this system is key to its failure
Mark Busby, UK
The lack of simplicity and transparency of this system is key to its failure. Calculations of awards are only issued on request and claimants are expected to accept whatever the Revenue's computer produces. Important financial matters are relegated to a telephone call which no doubt is rarely recorded by the applicant for later reference. When you discuss tax credits calculations with Revenue staff it is clear that they have no understanding of how the system and computations work and seem to be merely more than data entry operatives.
Mark Busby, UK

The system has been in total chaos since the first day. New forms kept popping through the post, sometimes identical to the last, sometimes completely different. I have a box file full of them. Even for a well-educated person it is impossible to know what they are telling you and what you are supposed to do. Staff at the call centre have always been kind and helpful and apparently efficient. We have always kept them up to date with changes. And yet we ended up being overpaid. Unlike the tax office, the tax credits office didn't allow to spread our repayments, they wanted a lump sum. That was very tough on my family. I have often wondered why this subject didn't receive more media coverage - is it because it affects the less well-off, hard working memebers of society?
Sally, Bristol, England

Some of the comments here are downright unpleasant. For families living on the edge of poverty an extra 20 a month is a lot of money, if they assumed that the amount they were getting was correct why should they not be spending that money? I haven't found out whether we have overpaid or not - I'm self employed so it's hard to judge my income - however as we only received a small amount of credit if we have to pay back it won't be damaging for us. This is going to affect the poorest families the most, and unless it can be proved people have been fraudulent the overpayment should be written off.
Rachel, Maidenhead, UK

I always let the tax credit people know whenever my husband has a change in his wages and I am always told it won't make any difference to my payments. Now they tell me I've been overpaid by 600. You try to be honest and it still gets you nowhere. Why should we bother?
Sarah, Fareham

Notwithstanding the fact that the entire tax credits system is a dog's breakfast, any overpayments of tax credits should be repaid. When the child's tax credit system was introduced, I worked out what I was due to, and received that amount. Surely it cannot be beyond the wits of people to figure out what they are due to, and to realise when they have been overpaid?
Nicholas Sims, Chesterfield, England

The last time I contacted the tax credit office due to a change in our circumstances I was forced to call four times! Only by the final call did they provide the correct response to my query! On each previous occasion they failed to ask important questions which would have changed the outcome. Also, each time they make a note of a change (even if it is incorrect and quickly rectified) you receive bundles of award confirmation letters!
Vicky, Blackpool, UK

I personally have only ever had positive experience of the tax credit system, I have found the helpline helpful and the processing of payments fast. I also cannot make head or tail of my statements but they are usually sent after the money has turned up in my account anyway. I was lucky to have been underpaid and the repayment to me was swift and efficient. I may of course have a different comment to make if I had been overpaid and sympathise with those in this situation. I am a lone parent of a 6 month old boy and tax credits have enabled me to return to work on a part time basis and build a future for my son.
Katie, Rochester, Kent

It took over ten attempts just to get through on the phone
Mark, Weston-super-Mare, UK
I've had all my payments stopped this year to repay the overpayments of last year. We filled out the forms as required with no errors and informed the Tax Office when my earnings changed, but still we were overpaid. It took over ten attempts just to get through on the phone. This system is over complicated and slow for people such as myself whose earnings can change each month. Frankly, I don't need the hassle.
Mark, Weston-super-Mare, UK

I think it is absolutely disgraceful that the overpayments may be written off. We are a young family with four children and are "currently living in poverty" but unfortunately we have never had a problem with tax credit overpayments. We could all either be fraudulent or play dumb when it comes to the amount in which we should receive. We are one of the unfortunate families that have twins that are not recognised by the government!
Anon , Stevenage, Herts, England

If somebody gives you a 20 note instead of a 10 note and you keep it then that could be termed as stealing. What's the difference here your stealing from the state in effect. We were overpaid by nearly 2k. We dealt with it (ok it took 3 months) and the way ours was resolved was not to receive any more payments until the overpayment was covered. It still doesn't deal with the incompetence at the source though.
Gareth, Conwy, North Wales

I have always been completely honest about my circumstances and advised about a pay increase immediately. My credit was reassessed yet 6 months later I was advised that I owed 2,000 and I had to repay it as I must have been aware of the overpayment! I sent in my complaint and have still not heard anything for 10 months now. Apparently the only way to further your complaint is to go through your MP which I am now doing. I would suggest everyone contacts their MPs as something must be done about this ridiculous situation. It is financially ruining the people for which it was intended.
Claire, London

I received an award when I changed jobs which was incorrectly calculated as if the income was monthly not weekly. It was obvious to me and I immediately called to rectify this as I was receiving far too much. They sorted it out straight away and told me I could keep the couple of weeks' overpayments I had received as it was a mistake on their part and I had reported it quickly. It works both ways, most people know roughly what they should be getting and how the system works, it is clearly stated that any change in circumstances should be reported and overpayments will be claimed back which is only correct as it is taxpayers' money after all.
Fiona, Aberdeen

Of course the overpayment should be paid back - unless it's clearly shown with supporting documentary evidence that when queried, the recipient was informed that there was no error. The problem stems from the government's inability to effectively manage large IT systems. Time after time they've been advised by the IT profession how they are getting it wrong. With a combination of the "jobsworth" programme management, weak leadership and farcical politically driven "least cost" approach you end up with repeated disasters like this (and the passport agency debacle and others).
Chris Bradley, Bath, UK

If it is an error, then of course it should be paid back. I am a taxpayer, so I should get some say in this - after all, it is my money too!
Rod Watson, Winchester, Hants

No. It's a mistake by the Inland Revenue. The cost of recovery will on average exceed the debt. If the Inland Revenue can't get it right, how can ordinary citizens? Quite apart from which the negative publicity will probably make overall recovery of taxes worse.
Chris Kisch, Milton Keynes

Of course overpayments should be repaid. If I make a mistake when calculating my tax, and let's face it, with the whole thing being so complex mistakes are easy to make, the taxman certainly doesn't let me off with any underpayment!
Steve, Sussex

This isn't the first time such mistakes have been made
Philip Jones, France
The earlier contributor is correct when saying the government and computer systems don't go together. This isn't the first time such mistakes have been made. If I, as a computer contractor wrote a program that generated such errors then I am responsible for those errors, not my client's customers. It's for this reason we have to have limited company status to work. Such errors in the commercial world would see me out of work permanently at the very least. For those that argue the overpayments should be returned can I also suggest the organisation that put these systems in are also penalised for what amounts to professional incompetence. In addition, the individuals that awarded the contract should be exposed for employing these people in the first place.
Philip Jones, France

Working Tax Credit is just the previous benefit, Family Credit, transferred from the DWP to the Inland Revenue. The Revenue then had to recruit staff to handle the complex calculations; it is no wonder it went wrong.
Stephen Goodchild, Leominster England

I am a single mum and am currently having to pay back 1500 from overpayments for the old Child tax credit. I have now been sent letters saying I owe 400 for the current tax credit system. If I try and pay all this back on my part time wages I can't afford to feed myself and my child, let alone put petrol in the car so I can get to work (which the government are supposed to be encouraging us to do!) I don't want to take a loan out to pay the money back as my earnings are not enough to enable me to be able to keep up the repayments. I feel trapped and don't know what to do
Zoe, Hemel Hempstead, Herts

Yet another government computer fiasco. Until they can get this sort of project right, there's no way they should introduce ID cards where information is kept on a computer database. The consequences of ID error because of computer problems don't bear thinking about.
David, Co.Durham

The tax credit system generates too much paperwork, via letters, which does not make any sense to a well educated and numerate person, I feel sorry for other people in this situation. The tax credits systems can make mistakes even when you have informed them regularly of your changes in the income and they can start deducting the overpaid amount from your future tax credits at their leisure. God save us. Personally I would rather not claim any child tax credits and live happily.
Dharminder Thiara, Telford, UK

Incompetent staff, useless IT systems, nightmare bureaucracy - all synonymous of this government. Who will be held to account? As for those who have received over payment - where is your personal responsibility? I know someone who has had a very nice holiday to America courtesy of this fiasco. A luxury I can't afford on my salary!
Mrs P , UK

My wife and I work full time to be able to meet up bills to satisfy basic needs. In order to do this, we are forced to leave the kids with minders. The government have now said we are not entitled to tax credit as a result. Our monthly pay only goes to pay for mortgage, minder and food. We have not been able to take a proper holiday in 3 years nor have we been able to buy a car. We are both owing heavy on credit cards (used mainly to buy other necessities like clothes, shoes). The system does not encourage honesty families who wants to work.
Abioye, London

Every penny of overpayment should be clawed back
Craig, Stirling, UK
As someone who subsidises families by not being a parent and as such is used by the government as subsidy fodder, I think every penny of overpayment should be clawed back. I am paying enough for this ridiculous system without allowing 1.9bn overpaid to remain so. Also, why are families suffering "hardship" as a result of reduced credits? What did they do before the government started cosseting them?
Craig, Stirling, UK

I am staggered by the size of some of these errors, which in some cases exceed my entire annual income. Is it possible that some more careful financial planning would help?
Anonymous, Glasgow, Scotland

My family receive Tax Credits, and so far have had no problems. The only issue I have with the system is - it's run by the Inland Revenue, but I have to tell how much I earn each year! Surely they already know? Don't their computers talk to each other, why do I send them a P60 showing how much I've earned a tax year - they get a copy of the P60, they know how much I earn!
Dave, Bristol, UK

The overpayments should be reclaimed, I know of people who have been overpaid and then deliberately kept the money without informing the HMRC. They assume that because their will be a stink made they'll get away with it. I don't believe people couldn't work out they were being overpaid - they should have kept the money separate and then when it was asked for they could repay it in one go. I don't pay my taxes so that other families can then keep benefits they are not entitled to.
Steve Miller, Liverpool, UK

If you are overpaid and you know you are overpaid why not try not spending the money, that way when you are asked for it back you should have no problems. I have no sympathy for people who say I was over paid and I told them, they took ages to sort it out so I spent the money and now I can't afford to pay it back. Tax credits should be scrapped. If you can't afford to support a family children then don't have them.
Chris, Coventry

If the revenue service has made an error it should make the adjustment on the tax code so people can pay back over a year. Unfortunately we have a tax system that tries to be fair about what people should pay, it would not be right for anyone to gain as the shortfall would no doubt fall to the rest.
Alex Kinsman, London

If taxes were lower, we wouldn't need a small army of extra civil servants to give some of us some of our own money back in the first place. Keep the system simple and everyone will be better off.
Anne, Surrey

We were overpaid by several thousand pounds with both tax and child credits
Roger, London
We were overpaid by several thousand pounds with both tax and child credits, although we only applied for child tax credit. This was allegedly through a massive computer error. It took ages to sort out after umpteen phone calls and we ended up paying back a huge lump sum just to rid ourselves of the bureaucratic nightmare. This was a total mess and the whole scheme should be scrapped. It has not worked.
Roger, London

I gave them my income figures and they worked out my entitlement. They paid for a year and then said I had to pay back about 50%. Strange because my pay hadn't markedly changed. I had one query and since then they've posted me about 4 identical assessments, but no indication as to how I should pay them back! What a waste! For me it's a minor financial irritation paying it back, but I know some people for whom it's a disaster. Stupid scheme and typical of Gordon Brown.
Pete, Bristol

Tax credit overpayment has left my parents in debt of over 5,000. It is not fair that they should have to pay this back, they have 4 dependent children and only one parent earning! How can they pay this back. The tax credit system has been very misleading and scandalous! Why should we have to pay for the governments mistakes!
Uzma Hussain, London

In January this year we received a demand for payment for 3,600 as they said we had been overpaid for the previous tax year. We only received 42 a month so how could we possibly owe them 3,600? The letter also stated that this was the second letter to advise of this and therefore we had to repay within 4 weeks. I keep all correspondent relating to tax credits and we had never received any such letter. The only communication from them on the date they stated was to advise of our new payments as I had returned to work part-time after maternity leave. When we spoke to the gentleman at the tax office he agreed that the letter we had was the one being referred to and there must have been a clerical error. He advised us to ignore the letter for the time being as he would refer it to the disputes team. We still have not heard anything back despite chasing them. The last time we spoke to them the officer advised that we weren't the only people in this situation and the numbers affected were in the thousands.
Louise Cole, Harrogate, North Yorkshire

My girlfriend found she could qualify for tax credits while she was working over 30 hrs a week for a local children's nursery. But when the nursery owners cut her hours down by nearly half she reported this to the tax credits, they replied that they only reassess at the end of the year! Which was about 6 months later by then she received and a very intrusive home visit by a tax credit rep saying that she now owed them over 3,000. This is now a matter our local MP is trying to help her with as this is ridiculous. The CAB where horrified by this matter as well. As of yet we are unsure what the latest news is on the outcome.
Paul Hinchliffe, Glossop, UK

As it stands I would be better off financially if I did not work
S Jones, Bridgwater, Somerset
I had a baby last November and because of a computer blip he still has not been added to our tax credit award, apparently the computer is not accepting live births onto claims. I have since returned to work and now have full time childcare costs for 2 children which are in excess of my income. I have till the end of this month to pay for my childcare or I will have to take my children out of nursery and leave my job. I am a working mum using my skills and degree to create a better environment for my children as the government encourages us to do. As it stands I would be better off financially if I did not work but chose to work so my children grow up seeing both their parents working and enjoying time off together as a family. I go to work for 'fun' so we can have days out and holidays as a family. I have contacted the Preston customer services in writing twice and I am still waiting for a reply. I have now been promised a manual payment in excess of 3,000 which will mean that when my award is processed I will be overpaid by this amount and I do not feel I should have to repay this because of their mistake.
S Jones, Bridgwater, Somerset

My wife and I both work for HMRC (not this dept)and have had to pay back overpayments. When you speak to people in the tax credit section nobody actually knows what they are doing. We are among thousands of families who have to work full-time and put our children in nursery to actually live. We are both having to take on second jobs to cover the government failings in looking after families. We receive two copies each of any paperwork that is sent out which in its self is a complete waste of time and money. We have decided not to bother claiming anymore as it is not worth the grief when they botch it up.
Greg Thornton, Taunton, England

I am not surprised that this is a mess. We had a change in circumstances back in January, and informed them straight away. After numerous calls trying to find out what was going on and various excuses as to why we hadn't heard back from the tax credit department, I finally gave up. I have received the renewal form now and it states to complete it as soon as possible. I am still waiting for the outcome from January!
Kathi, Cambridge

There are obviously major admin problems here both ways
Alan, Sittingbourne
We had the opposite problem! My wife stopped work so her earnings were zero. Every time we phoned up to sort it out we got a new assessment sent with her old earnings figures. After numerous letters and a 1 year+ wait we are still underpaid! There are obviously major admin problems here both ways and it all looks like an expensive (for the taxpayers) disaster to me.
Alan, Sittingbourne

The tax credits told us we'd been overpaid by 2000. A week later they admitted they were wrong and we didn't owe them anything. However, they'd already taken a large sum from our payment. Over 3 weeks later we are still waiting for our money to be refunded to us, we need it back to pay our childcare costs. They tell us it will be refunded but can't tell us when. This isn't the first problem we've had with them and no doubt it won't be the last.
Sam, Ipswich, UK

I worked for the benefits system, and knew as soon as my payment came through that I was being overpaid. I tried continuously for a year to get my payments stopped but was constantly told that I was being paid the correct amount.
Sharon, London, England

I am a single-working-parent struggling to bring up my child in one of the richest boroughs in England. I was overpaid (through no fault of my own) during the tax year 03/04 which I am apparently still repaying. I have just been told (on 6 different award notices) that I was also overpaid (by varying amounts) during the previous tax year 04/05 - so I must now repay two years worth of overpayment. Without some sort of social support from the government (and yes, I do pay my taxes too) I would not be able to survive here. Childcare alone is nearly two-thirds of my income - which leaves me wondering why I bother to work. The Inland Revenue is not equipped to deal with issuing benefits, there is no one to talk to on the end of the so-called helpline (with any competence) and they do not listen to individual circumstances. Instead it is a financial body working in tax years which does not help us, the individual who have to work on a day to day basis in order to survive.
Cecilia, UK

It's not only overpayments - my husband was forced to take early retirement last year and is now on a reduced income and yet on telling the agency, my tax credits were immediately reduced! I cannot work due to MS and only receive basic incapacity benefit. We still have a mortgage and teenage children to put through school and college.
Ros, Kent, UK

We are heavily in debt and are getting reduced payments of tax credits until the overpayments are paid back. We can't even afford to pay for food or basic essentials. It's a ridiculous situation. The government are so keen for everyone to work but make it so expensive. We are paying 700 a month in childcare and after school clubs just to be able to go to work for what? We only get the childcare element due to the overpayments so this leaves us very short every month. Childcare should be free and not just five morning sessions a week during term time for 3 - 4 year olds. We are considering moving out of this country before it gets to breaking point.
RL, Bournemouth, UK

I had to get my MP involved in order to sort out the mess
EL, Kent, UK
I had such trouble with the system that I had to get my MP involved in order to sort out the mess. The thing was when I first applied you had to fill in a form for the previous tax year, and that was when I was out of work having just given birth, therefore my income was quite low. I was, by the time of form filling, in work and my income was double that of the previous year. However they based my reward on what was on the form and I got too much. I called and wrote to them telling them they'd given me too much, and they never acknowledged any of my correspondence. A year later they started (without warning) taking back the overpayments at 25% per week of what I was then entitled to. This left me short for the nursery payments for my daughter. I argued with them that it was clearly their responsibility to make sure that they paid me the right amount, and having informed them immediately of a change in circumstance (as instructed) it was clearly their error. They also swapped my NI numbers around with another lady so I was unable to get any information regarding my case for some time from them. It was at this point I involved my MP and oddly enough things were sorted out rather swiftly.
EL, Kent, UK

I consider myself a reasonably educated and numerate individual, but I cannot understand my tax credit statement. I seem to be about 1200 in debt, but have always kept the IR informed about my changes in circumstances. I've tried phoning the IR helpline, but it is always busy and disconnects without giving you the opportunity to hold on. I will have to write to get an explanation.
William Hunter, Kelty, Fife

I would just like to comment that I have had no problems whatsoever with the tax credit system. In my experience as long as they are informed quickly of any change of circumstances, they are accurate, professional & friendly. I realise that it is easier to criticise and moan about government initiatives, but after a difficult start this scheme is working and is benefiting families who would not otherwise be getting this extra help.
Derek George Brown, Neyland, Pembrokeshire, West Wales

We had a bill of 4000 from these people after they admitted we provided the correct information at every point. We appealed with no success and have spent the last year piling up all kinds of bills while we pay these people off. I hope they do help other people in this position but it comes too late to help us.
Martin Timbrell, Bridgend UK

My wife and I were overpaid (by about 700) last year, and have been forced to repay this through PAYE alterations. Will we be able to claim this back if an amnesty is announced? - I don't think so!
Chris Jones, Carshalton, Surrey, UK

I too was overpaid in tax credits and have to pay back through my tax on my wages. I continually phone them and ask if the payments are right and they always assure me not to worry. Then at the end of the first year I was told I was paid 100something [pound] too much. The year after that I was paid 56 too much; thankfully last year's was correct. I am a single parent; luckily I can do a few extra hours at work to make up any money but not everybody is so lucky.
Vickie Christian, Walsall

An over payment was made to me, and they have asked me to repay 1600. I was asked to fill out a Direct Debit mandate to repay 400 per month, but it was supposed to start 3 months ago, and despite my telephone call to ask why they had not taken the first payment, they have still not. I refuse to call them again, so it would seem that they are not even able to follow through when you do as they ask. With any luck they have forgotten about me.
Mrs L Dixon, Bournemouth

Me and my partner were claiming working tax credits and child tax credits. Even though we filled out the form via the internet and sent three payslips for proof of my wage they still got my annual salary wrong, resulting in us being overpaid. Also, after a given time my employer takes over the payments, this happened but the IR still paid us the tax credits, which resulted in us being paid twice. At the time I was unaware I was receiving it from my employer and assumed the IR would automatically stop paying us when my employer took over. We had to pay back over 2000, our daughter's future savings account had to be emptied to help pay this back. It took several months to find out why we had been overpaid, each time the story changed, to this day we still haven't had an answer to why or how these mistakes came about.
Adam, London

There are too many benefits in this country and it encourages people to avoid the responsibility of living within their means. It needs to be simplified so that only the truly needy qualify.
Toby Coulson, Cobham, Surrey

Why not simply tax us less? Rather than taking the tax money and then returning the same money back to us, just don't take it in the first place.
Bill Godfrey, Daventry, England

Having worked on the Tax Credit project I can personally testify that it is nothing but an IT disaster and a bureaucrat's dream. The repaying of tax credits is a fair policy (as individuals are given information to work out roughly what they should get), but currently the Inland Revenue ARE allowing some people to keep over payments, and worse they are actually chasing up individuals who have repaid their over payments and giving them back the cash they were not entitled to. Surely instead of instituting further absurd procedures they should concentrate on getting the initial calculation procedures correct?
Tom, Nottingham

The problems arose because the government announced the timescale for the scheme without discussing how long it would take to develop the software, and testing time - that could have at least reduced the effect - was cut to roll it out in time. Working in IT this was not news to me, it is a common problem. Nor is it any consolation to those now in a hole trying to repay the money.
Irene, Scotland

Speaking as a civil servant of seventeen years experience - although not for the Inland Revenue - we have always struggled against understaffing, low wages, and computer systems that simply do not work properly. The link between the Inland Revenue computer system and the DWP one has caused all sorts of problems. And the CSA one is even worse! If the job is to be done properly more staff are required, but the government insists on reducing staff numbers because they think the technology can do the job. It can't. Social security benefit processing is about to be centralised. Just watch for the problems that will cause! Also, I don't necessarily agree with the concept of tax credits anyway. Why should the state subsidise low paying employers?
Paul, Poole

I, too, am out of pocket due to reclaimed overpayments from the IR. You spend hours completing forms ensuring you have the correct employment details and child information only for them to take no notice whatsoever. Also why do they pay so much for part of the year and reduce it for the remainder? Why can't they spread it equally over 12 months? I am a working single parent and struggle enough to make ends meet without having money taken from me. The system is ridiculous and needs changing NOW.
Karen, Leeds, West Yorkshire

I've been overpaid, but I was told on the phone that I would just be paid less in subsequent years to recover the overpayment. Why can this not be applied in all cases?
Matthew, Ely, UK

Does anyone now still think the government can run an IT project the size of the ID card/car tracking schemes proposed? On this evidence it's not looking good is it?
Mike, Reading, UK

I am heartily sick of this incompetent government taxing me to buy votes by creating a dependency culture. The only way to sort this nonsense out once and for all is OTOV - one income tax payer, one vote. No representation without taxation.
Steve, UK

Are tax credits administered by the Inland Revenue, or one of the agencies set up and run by a private company? If it is the latter, and the problems are caused by errors in that company implementing the Revenue's wishes incorrectly, then that company should pay, as they would be at fault.
Steve Tymms, Welwyn Garden City, England

It's not always the government's fault
Paul, Leicester, UK
I know of several people who deliberately understated their earnings to get enhanced payments and are now moaning that their payments have been cut dramatically. It's not always the government's fault.
Paul, Leicester UK

If you under pay your tax, the government is quick to fine, and impose interest payments. Why should the benefits system be run differently?
Geoff, Tyne and Wear

The whole system was set up like the 'Poll tax'. We had a, not perfect, but adequate system before of a higher tax relief. Creating more civil service jobs and a new bureaucratic system is bound to create many more mistakes and be incredibly costly. On top of that it suffers from incredible sex discrimination. If you are the father/husband you try ringing them. They will only deal with the wife/mother and they will only pay the money to her. So much for an equal society!
Colin, Worthing, West Sussex

The primary cause here was a computer system developed by an external company. Another outsourcing "success". The external company should make good the loss.
Chris Stevens, Kent, UK

I am staggered by the lack of compassion and downright mean spiritedness of some of your correspondents. Because the tax system is impenetrable to most people, families have to trust what the system tells them is the truth, and that the amount credited to their bank accounts each month is correct. If families have kept their side of the deal and revealed truthfully what their income is, there is no way they should have to take a drop in their income to bail out an incompetent system. The government should be taking the rap for this, not the poorest members of society.
Pauline Brown, London, England

Hmmm, isn't the government being a bit two faced about 'rebates'? On the one hand, they insist that the EU funding is inherently flawed, which necessitates the UK rebate, whilst then having a system where people give tax money to them and then have rebates depending on their circumstances?
John, Plymouth

My wife was on maternity leave so our income was greatly reduced
Paul, Neath, Wales
I was affected last year, when I was ordered to pay back over 1400 for over payments relating to the 2002-2003 period. At the time my wife was on maternity leave so our income was greatly reduced. This didn't make any difference as after contacting the Inland Revenue on three occasions I was told my tax code had already been adjusted to reclaim the amount over a twelve month period. Subsequently I was 125 down in my pay packet each month for twelve months, plus my wife was on standard maternity pay, we really struggled. I wrote two letters to the Inland Revenue and received no replies. In the end we ran up a large Visa bill to compensate for my loss of earnings.
Paul, Neath, Wales

Why should those who are overpaid be able to keep the money? Where is the legal basis for that? At the end of the day the extra money they got came from the tax payer - many of whom will be poorer than them.
John Bowes, Greenock

I think it's ridiculous, I know someone who was asked to pay back a lot about a year ago, she really struggles to make ends meet and was really panicking. They did let her off but it shows this has been happening for a while now.
Lianne, Cannock, UK

I myself was informed I had received too much tax credit. This I find hard to believe as I have always kept them up to date with any change in my circumstances and given them the amounts on wage slips, so they have always known how much I've earned. And they still get it wrong. Why should I suffer because of their incompetence?
Val, Leicester, UK

Tax creds - too slow to react. I've been made redundant so I need the money now but they say I have been overpaid last year so get less! This makes things worse for me. How is it helpful???
Alexandra, Dudley, West Midlands

The government should structure the tax system properly in the first place. Why take tax from all, then give back some to the lowest paid. Why not just take less from the lowest paid in the first place? Anyone remember married man's and family allowances??
Peter, Romsey, UK

There is no reason why poor families should be suffering hardship
Russell Kennedy, Chelmsford, England
Of course over paid credits should be repaid. Any over-payments are simply deducted from any new payments received. What is more, for the most part, if people actually returned the forms promptly, instead of waiting to the last moment, much of this confusion would be avoided. There is no reason why poor families should be suffering hardship as the forms are quite clear in your duties and responsibilities.
Russell Kennedy, Chelmsford, England

Can't we just tax poorer families less to start with? As it is we tax them then make them claim some of that money back! This must cost a fortune to administer and, as this report shows, is open to errors.
Matt F, Bristol, UK

Wouldn't it be easier and cheaper if Gordon Brown simply took less tax in the first place?
Douglas, Aylesbury, UK

If it is decided repayment is not required, will the people responsible for the errors get the sack, and not just the minister responsible? When I owe tax, I get a demand very quickly; when the taxman owes me money, it's amazing how long it takes to process the mail!
James, Hampshire

I was overpaid family tax credit by 85 last year and don't have a problem about paying it back. What I do have a problem with is the amount of paperwork that this involves. Every time the Inland Revenue write to me regarding tax credits I am sent two copies of the same letter, each with an identical tax credit information booklet. My husband (who unsurprisingly lives at the same address as me) also receives two letters containing the same documentation. Four separate envelopes landing on my doormat to tell me that I have been overpaid - but not asking me to do anything about it. A few months later we received another four envelopes asking for the money back! Wouldn't it have been cheaper to let me keep the money?
Suzanne B, Herts, UK

Try taking the funds from the pay packets of the idiots who designed the forms and systems which have led to the problem in the first place. Let's see how quickly it gets fixed under those circumstances. Start with the woman who runs the department - listening to her on the radio this morning she seems desperately out of her depth.
David Jones, Henley, Oxon.

Dealing with government agencies on money matters is a nightmare. Their assumption is they're right, you're wrong and the onus and stress (a lot of it) is on you to prove them wrong. The time it can take is mind numbing and the citizen should have a right of recompense in the event of public service mistakes.
John, Colchester UK

The Inland Revenue have bodged the whole system
AJ, Wakefield, UK
We were substantially overpaid, and despite telephoning every time a cheque arrived to inform them of THEIR mistake, the cheques kept on coming. We had to cash the cheques, because as far as they are concerned cheque issued is benefit paid! We are now paying back the overpayment, which is of course right and proper. Frankly the Inland Revenue have bodged the whole system.
AJ, Wakefield, UK

Presumably the people who received these overpayments were more than happy to spend them so they should pay them back. I have overheard people locally who knew they were being paid too much in benefits and then complained when payback time came. The whole benefits system should be scrapped - it encourages scroungers - people should live within their means.
Les, Morpeth, England

I think the over payments should be repaid, after all, it is taxpayers' money and it could be put to use elsewhere. I disagree with the pressure being put on parents to repay it and they should come to an agreement in which to pay it back without being hassled and bullied. I'm sure these families could use their many other child benefits to help pay back the overpayments.
Hannah Bartlett, Cumbria

If the government insists on repayments then there is no incentive for them to get it right in the future.
John Heath, London, UK

Overpayment of tax credits should only be repaid in cases of fraud by the applicant. Dawn Primarolo this morning on the radio simply would not accept that the system was causing poor families hardship. She also failed to put forward any solutions to solve the mess. In fact she tried to make out it was very good. With this type of attitude she needs sacking.
Patrick Cunningham, Yorkshire, UK

Government and computer systems do not go together in this country
David, London, UK
Let's face it - government and computer systems do not go together in this country. Of course the families affected should not repay the money - the government devises these hideously complex payment systems, and then penalises the people they are designed to help when the systems break down.
David, London, UK

My concern is not about having to repay tax credits - the literature makes it clear that this may have to happen, and apparently a change of income of 2,500 or less is ignored. My problem is that the figures are "impenetrable". The agency appears unable to be able to provide fully worked calculations to justify their awards. I have asked and asked again for the calculations for the first two years, and have been given jumbled information that is impossible to follow. I have effectively been told "The calculation must be right, the computer does it automatically".
Peter, Brighouse, Yorks, UK

Since the introduction of tax credits by the last Conservative government in 1989, and until the new tax credits system was introduced in 2003 by the current Labour government, awards were made for a period of 26 weeks irrespective of any change in circumstances. It is this fundamental change which now requires claimants to notify the Inland Revenue of a change in circumstances that has led to this mess and a reduction in income for the least well-off in our society. Had the system not been changed then there would be no question of overpayment in the first place.
Richard Atkins, Wortham, UK

We received 180 per month last year and now this has been cut to 43 per month and we were informed we owed them about 500. We told them of any changes to income etc throughout the year, but still they messed up. Surely they should take the hit for miscalculating awards? Having a drop of 137 in income per month is a lot for a family of 4 on one income.
Ian, Edinburgh, UK

This is a difficult question to answer. Forcing people with money troubles/low income to make repayments adds unnecessary burden to individuals, but general overpayment means everyone loses out due to extra tax burden.
Dominic, Plymouth, UK

No - but I have a friend whose income fell last year, and then had her tax credit reduced. Never mind the 6 copies of the same 72 page leaflet the IRS sent her in two days. Was ever there a government SO in love with red tape?
Jeremy Poynton, Bristol, England

We have had our payments stopped and we were not informed either. It just happened. Thankfully we are not as badly off as others and I really feel for them. Any other company that had made errors would have no right to ask for money back. It sickens me that low-income families are suffering are penalised for this systems mistakes.
Rebecca, UK

Of course overpayments should be collected. I don't get any of these credits so it's my money that the overpayees are holding! If they are not to be collected, the administrators/IT companies/government ministers should be made to pay me back with interest.
James Rigby, Wickford, Essex

It's unfair to force hardship on families who have received overpayments. The British public meekly accept the political incompetence which throws away millions of taxpayer's money. Nobody is ever held to account!
Brian Langfield, Yorkshire, UK

I think this problem is wider than just the tax credits system. Last year I was overpaid by 1000 in housing benefit, and about 600 in tax credits. They simply reduced future payments to pay back the difference. The golden rule here is make sure you work out how much you SHOULD be getting yourself. There are websites on the internet that help you work it out. Any extra keep to one side so you can pay them back immediately when they get it wrong.
Peter Jackson, Portsmouth, UK

As I understand it, the Inland Revenue has been given 18 months to get the problems out of the system. Maybe if they were banned from reclaiming overpayments for that period, it might give them an incentive to get things resolved quickly. Otherwise, they have every incentive to drag their heels, because it won't be them suffering.
David Hazel, Fareham, UK

No I don't think they should. Or they should be making it easier for families to pay the money back and not demand it back in unfair amounts that most families probably couldn't afford. If any other company made such a mistake they would have to sort the problem out themselves, not go to its clients and ask for the money back.
Ian Watts, Streatham Common

This is a bit of a tricky one. On the one hand, I am sure that there are many people who were totally unaware that they were being over paid and would genuinely suffer if asked to repay. On the other hand there are also many, including myself, who have always been fully aware that they have been overpaid and should expect to have to pay the money back at some point. How do you distinguish between the two? I would have no issue in paying back my overpayment but would be very upset if similar undeserving recipients were let off theirs.
Richard Wolff, London, England

Firstly, the financial incompetence of this government is staggering. How can they just overpay two billion pounds in tax credits and not be subject to a public enquiry? Somebody should be sacked for this. As for the overpaid money, it should all be paid back, otherwise it will be the rest of us taxpayers who are already being hammered to pay even more. There should be no exceptions.
Nigel Rayner, London, England

People shouldn't have to pay for the government agency's mistakes. However this should include the taxpayer who is increasingly funding a benefits culture, which is resulting in long term unemployed and people who are becoming increasingly reliant on government handouts.
Ian, Brechin, Scotland

Tax credits backfire on families
22 Jun 05 |  Business


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