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Last Updated: Thursday, 27 October 2005, 08:44 GMT 09:44 UK
Tax credit investigation launched
Mother pushing a pram
Tax credits are designed to help working families on low incomes
The troubled tax credit system is to be probed by a powerful committee of MPs.

Administrative error, fraud and claimants failing to report changes in income have all been blamed for 2.2bn of tax credit overpayments in 2003/04.

The Treasury Select Committee said it would concentrate on finding solutions to the problems which have dogged the tax credit system.

However, the committee said it would not be "raking over past administrative decisions and practices".

The committee will start evidence sessions in the new year.

Complexity

The current tax credits were introduced in 2003 in the form of child tax credit and working tax credit.

But the new system has come under severe criticism for being so complex that 1.8 million claimants were overpaid in 2003/04.

Many of them subsequently faced hardship after being asked to repay money they had already spent.

Recently, the National Audit Office identified "unacceptable" levels of fraud and error.




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