Tax credits come under fire

Tax credits have come under fire for not helping the very people they are designed to support.

08:26 09 September 2005

Tax credits have come under fire for not helping the very people they are designed to support.

Tory MP Edward Leigh has come forward to call the current system a "nightmare" which has "seriously mistreated" thousands of victims.

And a report by the Commons Public Accounts Committee finds that the system is so complex that the civil servants in charge of it do not understand it.

Six million families receive either child tax credit or working tax credits - many have not received enough, others got too much and then had to pay the excess back.

Mr Leigh said: "Hundreds of thousands of genuine claimants - many of them in very difficult circumstances - have been seriously mistreated.

"The Inland Revenue has a lot of work to do to get the tax credits system operating fairly and effectively."

He added: "There must be a question mark over its ability to do this, especially given that staff must also tackle the backlog of everyday tax collection work caused by having to firefight tax credit problems."

Last year, more than 1.9 billion was overpaid to 1.9 million people, meaning that each claimant received around 1,000 too much.

Many then received demands to give back the overpaid money.