Taking the credit: Have your say

Charities are concerned families are being pushed into poverty

Tax Credits were hailed as a revolution in welfare payments but for many the scheme has gone badly wrong.

Critics say fundamental flaws have left vulnerable households facing huge bills for overpayments, pushing many into hardship.

What has been your experience of tax credits? Have you been overpaid? How will you pay the money back?

What do you think should be done about the overpayment problem? Does the tax credit system need reforming?

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This system of taking money away from people (in tax), then crediting it back (as tax credits), and then wanting to snatch it back again (as recovered overpayments) is ridiculous.

Why not simply raise the personal allowance, so one pays less tax to start with? Alexander Davies, London

If the aim is to let working people keep more of their money, then why not simply raise the personal allowance, so one pays less tax to start with?

If the government insists on discriminating between those who do and those who do not have children, surely that simple measure could be built into the tax code system and the personal allowance altered accordingly.

The formula for working out tax credits is now so complicated, even the computer which processes awards has to be left overnight to work it out!

The system is completely crazy.
Alexander Davies, London

The tax credit system appears to be a means-tested benefit system.

I used to get tax allowances. Now I have to do the calculations for the government to be told that I am not entitled.

The information that I already provide for the Inland Revenue is now not good enough, yet it was for the tax allowance.

This system is complete madness John Davies

I would now be entitled if I was not earning, for example, if I was in prison. I have to make declarations about my partner's earnings and I have to give details of the hours of working "agreed" between my employer and me.

This system is complete madness. Not only is it failing the people that need extra money but it is now disadvantaging many people who had previously been able to retain a little more of what they had earned.

And then to emphasise this new disadvantage we have to work it out for ourselves.
John Davies

I believe this is serious incompetence from the Inland Revenue. Plus its arrogance and failure to admit to its mistakes are no surprise to me.

I've been out of work with health problems for nine years because of the Revenue.

At one point I was threatened with bailiffs to recover money I did not owe. About the same time the IR would not pay a tax rebate due to me. I have no respect for the way it behaves.
Andrew Currie, Wales

I have been on tax credits since the start. I have found it to be great.

The people who work there have always been very helpful and easy to talk to.

I think some of these people want money for nothing and are claiming ignorance as their defence Miss Karen Alden, Bognor Regis

I cannot understand why people have got themselves into debt because if you read the information that comes with your award it clearly states that if your wages go up or down you should inform them as soon as possible so they can adjust your benefit accordingly.

If they do make an error and send you two weeks money instead of one, why haven't these people phoned or written to get it sorted out quickly?

Now I'm not clever by any means but I do know the very simple rules clearly stated when you apply for and get your award. I think some of these people want money for nothing and are claiming ignorance as their defence.

I think HM Customs and Revenue are all very helpful and do a thankless job.
Miss Karen Alden, Bognor Regis

Your programme didn't tell the listener how much in tax credits Faith received. Had you given that figure it would have put the £9000 "debt" in perspective.

Clearly there are flaws in the system. It is a new system, and people are only just beginning to understand its ins and outs.

The Inland Revenue's internet site fails to show the basis of the calculations Pete

Many claimants will feel the need to use forecast figures for the year ahead rather than last year's finalised income figure, if they want to be fairly sure about how accurate the award is.

The Inland Revenue's internet site fails to show the basis of the calculations. That would help people to assess whether their award was likely to be too high or too low.

It should be updated to allow "what if" circumstances to be entered. For example, what if I pay £1000 in child-minding costs this year? What if my income rises by £4000?
Pete

The whole tax credit system is a mess.

It has been obvious to some people that they have been receiving massive overpayments, but rather than put the extra money in an account and earn interest off it until the money is claimed back - as advised by some HMRC staff - they spent the lot and have the cheek to complain when they are asked to repay it, claiming they can't afford it.

On the other side, the way the credits are calculated is laughable. If you are separated or divorced you don't need to declare any maintenance payments received.

The way the credits are calculated is laughable Andy

I know someone who is getting £1,000 a month from their ex, plus earns over £600.00 a month for two days a week work, and is getting over £400 in tax credits to make up her wages and cover childcare costs.

However, a married couple, both working over 36 hours a week, whose joint income is less than £1,600 a month, with much higher childcare costs would only get £152.33 a month.

My wife and I both work full time, have two young children we would love to spend more time with, and get the basic tax credit of £42.00 per month.

We both work beside single parents who have switched to part-time or job-share since the new tax-credit system started because they are better off.

How is this a fair and equal system?
Andy

Whilst I have every sympathy for those who have been overpaid and now have to pay the money back, I do believe those overpayments should be repaid in all circumstances, not merely written off.

People have to realise that this is money to which they are not entitled!

If the situation was reversed, and the claimants had been underpaid, then they would rightly expect HMRC to make good the underpayment, so why shouldn't HMRC expect the same of them?

Anyone who does not repay an overpayment is stealing Ian, Edinburgh

I receive tax credits, but I always check in advance what I should be receiving, and if there was a significant difference, would query it immediately. I would not spend it until the query has been resolved.

Thankfully, this has not happened yet, but it is not difficult to check how much you should be receiving. The HMRC website can do this, and that way you will know whether or not your award is correct.

People have to take some responsibility for their own position, and not simply rely on what they are told.

In effect, anyone who does not repay an overpayment is stealing from HMRC, and that ultimately means they are stealing from the rest of the taxpaying population, which is totally unacceptable.
Ian, Edinburgh

According to the Revenue I have been overpaid and it has been taken back from each year's entitlement.

This year it has clawed back £429.93 (from previous years) and there is a note telling me next year it will collect £245 from me.

I have kept the Revenue informed at all times, yet there appears to be well over £1000 which has been recovered from me Sharon Piddock, Southampton

At one stage my payments stopped completely for over six months and I had to go to work and grovel for extra hours as I would have been in difficulty.

There is no way you can check these sums are correct and if you query it they just tell you it's right.

"Brick wall" is correct.

I have kept the Revenue informed at all times, yet there appears to be well over £1000 which has been recovered from me.
Sharon Piddock, Southampton

I think the system does needs to be reformed as I have been overpaid which has had an effect on my income.

What started off as a good way of low-income families earning a bit more money, has led to hardship and worry for a lot of families.

Another problem with the Tax Credits is it's too complicated to apply Craig Tucker, Nairn

Surely the government could come up a way of simplifying income rises without reducing tax credit payments unnecessarily?

Another problem with the Tax Credits is it's too complicated to apply. It's hard to know whether the Inland Revenue wants you to state your income before tax or after tax.

Also, because your award is based on the previous year's income, it is out-of-date as income rises yearly.
Craig Tucker, Nairn

I have had no problems with tax credits, as a lone parent they are a very important part of my income.

I carefully read the section on changes in your income and informed the tax credit office when my income went above the stated amount. It immediately adjusted my payments.

Surely if everyone had done this then they would not have got themselves into such a mess?
Anon, Norwich

We were originally told we owed £7,000. At one point this escalated to £13,000. The bill is now £11,500. We have no idea why.

We filled in the forms correctly. We have received 25 reassessments variously stating that my husband is disabled, I am disabled, he is a carer, I am a carer, he works 55 hours a week, he is unemployed, our younger daughter is disabled, our older daughter is disabled.

Mr Blair has responded personally to our letters but seems to have no idea of the extent of the problem Jan Rowley, Wolverhampton

The accompanying mathematics are baffling to two persons educated to post-grad level.

This problem has been going on for two years.

Mr Blair has responded personally to our letters but seems to have no idea of the extent of the problem and still hails tax credits as a flagship policy.

Just who is advising him? The Inland Revenue has admitted its mistake to our MP in writing, but continues to demand repayment on the grounds that we should have known.

We knew there were errors - we pointed them out - that is why we have had so many reassessments, none of them correct.

We did everything right and still we are harassed.

My advice is don't touch Tax Credits - if they're not silently eroding your family finances already you can be damn sure they will in the future - unless you can afford an accountant to keep them under constant review.
Jan Rowley, Wolverhampton

Well done for your excellent programme on the fiasco of the tax credit system. Following the government's recent reduction of majority in the general election, Tony Blair said that they had got the message and would listen more in future.

The only regret is that this was not broadcast before the general election Mervyn Mugford, North Devon

However the fact that no-one from the government was prepared to answer questions on your programme shows it is as complacent and out-of-touch as ever.

I hope you will repeat the programme in a peak listening time. The only regret is that this was not broadcast before the general election.
Mervyn Mugford, North Devon

As a taxpayer not entitled to Tax Credits I get the distinct impression that I am being ripped off more than ever before. If people have been overpaid they have an obligation to pay the money back.

However, it is not only the mistakes that are being made, it's the massive amount of fraud that needs to be investigated.

People who work for the Inland Revenue know all about it but are afraid to speak out because they will lose their jobs.

The vast majority knew full well it was not their money and should not have been spent Ron Metcalfe, Sunderland

I have been told of a family in receipt of £31,000 a year.

The man of the house is claiming working family tax credit for 14 children he claims are his own. He is not yet 30 years of age.

I knew of another case where a family has been in receipt of twice the amount of family allowance they were entitled to and it was allowed to run for 16 years. They have been told that the overpayment, which they were fully aware of for 16 years, need not be paid back. Why condone fraud?

In your programme a great deal of sympathy was shown towards those who have been overpaid.

Anyone employed by the Revenue will tell you that the vast majority knew full well it was not their money and should not have been spent.
Ron Metcalfe, Sunderland

It is difficult to know whether you have been overpaid, especially if income varies a lot between years (e.g. extended maternity leave).

The helpline will tell you if they think the amount you have been paid is correct, but the system is so complicated it is difficult to check.

Therefore you cannot risk using money you may well be entitled to because it may be taken back in future.
David Johnson, Lancaster

I am amazed at the lack of planning that went into this system of credits.

I too am having to pay back the credits I incorrectly received as a result of someone else's miscalculations.

The present chaotic system of the Revenue deducting Income Tax and then paying some of it back is madness Paul Reid, Stockport

I can hardly be blamed for not realising I was being paid too much though. The overpayments occurred in the first year of the system, so I had nothing to compare it with.

The present chaotic system of the Inland Revenue deducting Income Tax and then paying some/all/more of it back as a credit is nothing short of madness.

If there is to be a means-tested credit system, it should start from the point where you initially stand: Compare my top-line earnings with my perceived financial needs and then add or deduct money to/from my salary through Income Tax.
Paul Reid, Stockport

I have just listened with interest to your programme on tax credits. I have the same problem with Disabled Person's Tax Credit after starting work two years ago.

I am suddenly up to my neck in debt having survived on Income Support through 13 years of ill-health with no debt whatsoever.

What seems to get forgotten in this debate is that we had, in this country, a system that worked fine before the Inland Revenue got involved.

We had the Working Family Tax Credit and Disability Working Allowance instead of Working Tax Credit and Disabled Person's Tax Credit. These were worked out using the previous six months of income. You were paid at that rate for a fixed six months, after which you reapplied for the next six months, and so on.

If your income went down sufficiently, you could claim Income Support to make up the difference.

This sorts out all the problems faced in both the UK, Australian and Canadian schemes mentioned in the programme.

It is a personal disaster for many families and individuals who were struggling to begin Elisabeth, Birmingham

The scheme was also run and managed by the Benefits Agency, who actually have experience and years of practice helping/supporting vulnerable people and families.

I claimed this benefit at one point in the past, for a year, and it was easy to claim, processed promptly and easy to understand.

A cynic might argue that the scheme got transferred to the Inland Revenue so that it no longer appears as a cost to the benefits system, thus allowing government to claim that they "spend less on benefits".

In fact this system is far more costly to the tax payer. Just as importantly, if not more, it is a personal disaster for many families and individuals who were struggling to begin with and thought they were getting a much needed "leg up" when starting to work again.
Elisabeth, Birmingham

I am one of the 40% of UK citizens who are single. Single people are penalised in this country, forced to subsidise all these huge sums being given to families under the tax credit system, and to fund all the bureaucrats who operate it.

I would just abolish it entirely and sack all the civil servants R Knight, Kingston Upon Thames

I find it outrageous that people think they should escape repaying overpayments just because they claim they didn't understand the system.

They were quite happy to accept the overpayments, so they should accept their financial responsibility to pay the money back, especially as the money only counts as an overpayment because their own income had increased, so they were doubly better off at the time the overpayments were arriving.

I agree the system is too complex. I would therefore just abolish it entirely and sack all the civil servants.

The money saved should be used to raise income tax allowances for everyone, including hard-working single people who already subsidise families quite enough.
R Knight, Kingston Upon Thames

Both my husband and I have had letters to say that we were overpaid. It amounts to about £4000. Money that we just don't have! Tax credits were set up to help families like us not to put us further into the red.
Jo Colehan, Swansea

As a CAB advisor I find the Revenue the worst agency to deal with by far.

It simply refuses point blank to take account of its own mistakes. Mistakes which are commonplace.

It's an ongoing disaster which requires fundamental reform Jim, Tyneside

The tax credit system is complicated and it's evident the Revenue has had to employ new people to cope.

However it neither has the skill nor the numbers required for the job. Nor is it ever likely to. As the system is too complicated for many Revenue staff then it's obviously way too complicated for recipients.

It's an ongoing disaster which requires fundamental reform.
Jim, Tyneside

I am an ex Inland Revenue compliance officer, and a single parent, supporting my two daughters completely alone, because the CSA is a toothless tiger.

The new Tax Credit system is so bad and unfair that I was forced to give up my civil service job because I could no longer continue to work as an employee of the Inland Revenue (now HM Revenue and Customs)without the fear of getting into debt (a dismissible offence for Inland Revenue Staff).

The Tax Credit System is completely open to exploitation and needs to be rewritten Sue, Hereford

I left my compliance job two years ago after 16 years of service to become a self-employed tax and business advisor. My ex-colleagues now wish they had done the same.

The Tax Credit system is completely open to exploitation and needs to be rewritten. Its most common problem is that it penalises married couples and single parents without maintenance, another area in need of government shake-up.

If we, the ones who know the system well, fail to understand and survive its bureaucratic complexities, what hope can the general public have?
Sue, Hereford

How can the Inland Revenue say people should be "reasonably aware" that they have been overpaid?

It needs to make it clear how your entitlement is calculated Peter, Milton Keynes

I have never been able to fathom how the Inland Revenue calculates how much you are entitled to in tax credits.

If it wants people to know if they have been overpaid, then it needs to make it clear how your entitlement is calculated.
Peter, Milton Keynes

I can only be positive! Being widowed and with a disability I struggle to provide for myself because I am restricted as to the type of work and hours I am able to do.

Tax credits have literally lifted me out of a poverty situation.

I have had no problems with payments and always received clear and understandable advice from friendly staff at the end of helpline.
Sandra Hazelwood, Ipswich

I recently lost my job and am currently claiming Jobseeker's Allowance.

This tax credit fiasco could bring down this government, it is that bad Ian Kirk, Poole

I contacted the Inland Revenue to tell it about my change in income.

The next thing, I receive a letter from telling me I owe £1,200 because of overpayments, despite the fact I have always kept the Revenue up-to-date with my salary over the last few years.

Talk about kicking you when you are down. This tax credit fiasco could bring down this government, it is that bad.
Ian Kirk, Poole

Since the calculations of tax credits are based on previous year earnings overpayment can happen once you switch to a new job with higher pay.

In my case, I have informed the hotline 3 times and even wrote a letter about my new pay and my husband's, as we both changed job.

I gave the new figures and inquired if my payments are still calculated correctly, yet to date there is still no reply and tax credits still come to my account.
Mrs E Bautista, Reading

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