Oops! Tax credits worth £315m given away in error

The government gave away £315m in childcare tax credits mistakenly last year, according to official statistics. An error and fraud statistics report on child and working tax credits was placed in the House of Commons library last week.

It showed that 260,000 claimants benefited from error and fraud relating to the childcare element of the working tax credit in 2007/08, which amounted to a sum of £315m. In 2006/07, the figure was £320m.

In a statement in the House of Commons, financial secretary to the Treasury Stephen Timms said the government had already introduced additional checks to prevent error and detect abuse. But he added: “HM Revenue and Customs will use the analysis published today to refine its strategy.”

Purnima Tanuku, chief executive of the National Day Nurseries Association, said the figures underlined the need for the system to be reconfigured. “These figures do illustrate the benefits of direct payments to providers of tax credits,” she said. “Not only would this eliminate fraudulent claims, it would also help vulnerable families who could be confident of taking up their entitlement.”

I am not sure that we really want the additional administration of receiving parents’ tax credit payments – what do you think?

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