Page last updated at 10:05 GMT, Tuesday, 13 June 2006 11:05 UK

Migrants wrongly get tax credits

A cashbox
Millions could have been wrongly paid out

Thousands of immigrants have received tax credits they were not entitled to, BBC News has learned.

Officials decided they did not need to prove they were eligible. All they needed to make a claim was a national insurance (NI) number.

But on 1 June it emerged that thousands of workers suspected of being illegal immigrants were given NI numbers.

Between April 2003 and December 2004, 2,700 families were wrongly paid credits by the Inland Revenue.

The credits each could have been worth more than £10,000 in some cases.

Overpayments to families have averaged £1,000 a year so if all the 2,700 families had claimed for the whole of this time it would amount to millions.

Millions lost?

The payments were revealed in documents obtained by the BBC under the Freedom of Information Act.

Many migrants with NI numbers are not entitled to claim tax credits.

But revenue staff were told not to investigate cases of migrants who had failed a crucial UK residency test.

Although the rule change was suspended in December 2004, payments were not completely stopped until autumn 2005.

Department of Work and Pensions (DWP) guidance says that NI numbers should never be used to provide access to benefits.

A department spokesman said all fraudulent claims would be pursued and that all incorrect payments had been stopped.

And a HM Revenue & Customs spokesman said: "This is an inaccurate version of an old story that was widely reported last November."


Liberal Democrat work and pensions spokesman David Laws accused the government of being careless with taxpayers' money.

He suggested that ministers had been so desperate to make sure Gordon Brown's flagship credits scheme work that they had not used the checks usually used for benefits.

Mr Laws told BBC Radio 4's Today programme he was shocked.

"It appears that, from then on for about 18 months, the Treasury was relying on the Department of Work and Pensions to issue National Insurance numbers as a proper check on people's entitlement to work here," he said.

"But we now know that the DWP was not actually putting in place the proper immigration checks.

"The Treasury was relying on the DWP, the DWP was relying on the Home Office and the Home Office doesn't seem to have been doing its job, and as a consequence millions of pounds have been paid out in tax credits, and possibly in benefits as well, which shouldn't have been paid out."

Mr Laws claimed the payments might bring the total fraud and error costs for the tax credit system to more than half a billion pounds a year.

video and audio news
Hear more about the tax credits for immigrants

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific