Write off all non-fraudulent tax credit overpayments whilst continuing to recover those resulting from claimant fraud.  This will save innocent, hardworking families from the distress and hardship caused by system-created errors, and will save the millions of pounds currently being wasted on forcing families who spent their awards in good faith to somehow find money they do not have.  Compassion and sound economics all in one!

Why is this idea important?

Tax credits were meant to reduce poverty and make work pay but up to £5.8 billion of tax credits goes uncollected each year, according to the previous government’s figures.

The Citizens Advice Bureau has found that only 1 in 5 entitled people actually claim working tax credit, many fearful of bureaucratic errors and unsolicited future debt.  Advertised as “Money With Your Name On It” to offset low wages and provide vital support for lower income families, countless honest workers trusted HM Revenue and Customs to correctly calculate their entitlement, and spent their money in good faith providing for their dependents.  The draconian recovery tactics now used by HMRC to snatch back historic overpayments strikes terror into the heart of innocent people and would be the envy of any dictatorship; totally inappropriate to a nation whose pride is its sense of fair play.  HMRC is allowed to endlessly admit sloppy mistakes on overpaid claims, yet continually absolve itself of all responsibility, being its own judge and jury. Millions of pounds are being spent in the pursuit of money which has already gone, whilst the low take-up of tax credits is marvelled at, analysed and dissected, and further money thrown at encouraging reluctant lower income families to claim.  Meanwhile the obvious solution is ignored.

We need our new government to grant an immediate Amnesty of all non-fraudulent overpayment claims.  If shame and compassion haven’t to date prompted an urgent write-off, the staggering long-term costs of deadlock dispute should.  One look at the balance sheet for recovery versus write-off should soon convince any critic that under the current, draconian recovery policy, the Treasury’s resources are diverted and overstretched on an endless bureaucratic trail that invariably ends up costing more than is recovered from the hapless overpayment victim. The system cannot move forward because it is chaotically busy looking back, haemorrhaging scarce public money as it goes.

Despite many overpayment victims being kept unaware of their rights, they soon sense injustice and growing numbers are empowering themselves to fight back, through the growing user group Tax Credit Casualties.    Every successful case simply adds to the overwhelming body of evidence available that the system, for all the rhetoric of its success, is failing too many honest, hardworking families.    Bad practice, data loss, insider fraud, the cruel annulment of previous awards when returned renewal packs go missing, the maternity leave trap, HMRC internal guidance to only discuss the issues claimants themselves raise, the rhetoric-practice gap in exercising Revenue discretion in cases of serious illness, bereavement, mental ill health and acute hardship, breaches of confidentiality and premature court action are just a few examples of injustice.

Every victim successfully evidencing their innocence of blame, through data access requests which cannot lie, provides a further piece of the hellish jigsaw, showing a failing, incompetent and ruthless system.  This can no longer be ignored by central government; it is quite simply wrong.  Within all our main political parties there are supporters of a full write-off, and an Amnesty has been sought at various times by Citizens Advice, Advice Northern Ireland, the Child Poverty Action Group, One Parent Families, the Royal College of Nursing, the GMB and UNISON and the Parliamentary Ombudsman, among many others.

Campaigners and victims want to see our new government putting just a portion of the unclaimed tax credit billions to good use, freeing the innocent indebted from the nightmare of tax credit overpayment bills, and giving honest victims back their lives and dignity. 

I urge everyone, not least our elected MPs, to support a tax credit overpayment Amnesty as an important step towards tackling poverty, encouraging future take-up of tax credits by qualifying families, and securing a safer, fairer tax credit system. 

One Reply to “Immediate Clean Slate for all Non-Fraudulent Tax Credit Overpayments”

  1. I too have to experience alleged tax credit overpayment . I have been harassed by hmrc continuous letter s debt collectors saying I owe thousands which I don’t . I am appealing trying to understand were this debt has came from six years ago this is so unjust an feel defeated

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