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Tax Credits

Volume 403: debated on Monday 14 April 2003

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To ask the Chancellor of the Exchequer what criteria childminders must fulfil in order that their clients may claim children's tax credit. [107480]

The child care element of the Working Tax Credit is available for safe, secure, good quality childcare which is approved or regulated. That is why childminders must be registered with the appropriate regulating authorities. Each regulating authority decides on the criteria and standards childminders should reach before they can be registered. For England, the Office for Standards in Education (OFSTED) registers childminders against the National Standards for Under Eights Day Care and Childminding. In Scotland, the regulating authority is the Scottish Commission for the Regulation of Care. In Wales, it is the Care Standard's Inspectorate for Wales and in Northern Ireland it is the local Health and Social Services Trust.

To ask the Chancellor of the Exchequer how many hon. Members are drawing the Working Families Tax Credit. [108973]

Working Families' Tax Credit has been replaced by the new Working and Child Tax Credits. Nine out of 10 families with children will be eligible for the Child Tax Credit.

To ask the Chancellor of the Exchequer if he will make a statement on the progress being made to ensure that all recipients who are eligible for child tax credit are able to receive it. [107289]

The Inland Revenue has written directly to claimants of Working Families', Disabled Person's and children's tax credits, inviting claims for the new tax credits, and followed that with up to four reminders. Employees receiving Children's Tax Credit through their PAYE codes received a special insert with their 2003–04 coding notices, and there is a prominent reference to the new tax credits in the uprating letter going to all seven million Child Benefit recipients. These direct contacts are being supported by a high-profile publicity campaign on television, in the press, on radio and online—aimed at everyone entitled to the new tax credits.Child Tax Credit is paid directly to the person in the family mainly responsible for looking after the children. Claimants can choose to receive it weekly or 4-weekly. The first payments are being made this week—the first week of the tax year.

1999–2000 (6 months)2000–012001–022002–03
Cases identified for investigation (a)(1) 14,162(1) 28,898(1) 23,123(1) 28,026
(2) 251(2) 808(2) 824(2) 625
Cases investigated (b)(1) 4,022(1) 30,543(1) 21,816(1) 26,880
(2) 110(2) 644(2) 801(2) 625
Cases found to be non-compliant (c)2505,2138,10813,794

To ask the Chancellor of the Exchequer how many families with children are expected to be ineligible for the child tax credit because their earnings are too high. [107406]

Nine out of ten families are expected to be eligible for Child Tax Credit. Therefore it is estimated that 10 per cent. of families with children have annual household income that is too high for them to receive the Child Tax Credit.

To ask the Chancellor of the Exchequer what proportion of claimants for the new tax credits have opted for payment by girobook. [107418]

The new tax credits are paid either directly by the Inland Revenue, or by the employer—with wages. The Inland Revenue aims to make any direct payments of tax credits into a bank account but, where suitable banking facilities are not available, tax credits are paid by girocheque.

To ask the Chancellor of the Exchequer how many allegations of improper use of the childcare tax credit have been communicated to the Inland Revenue's Childminder's hotline; and how many of these have led to (a) an investigation for fraud, (b) a penalty for fraud, (c) a successful prosecution for fraud and (d) a custodial sentence on grounds of fraud. [107419]

The child care element is only one component of both Working Families' Tax Credit (WFTC) and Disabled Person's Tax Credit (DPTC). An enquiry into a WFTC/DPTC award may involve more than one element of non-compliance.The Inland Revenue have received over 2100 allegations of non-compliant applications for childcare tax credit. It is not possible to provide the additional information requested.

To ask the Chancellor of the Exchequer how many claims for the working families tax credit have (a) been identified as being appropriate for further investigation because of the possibility of fraud, (b) been investigated for fraud, (c) proved to be partially or wholly fraudulent, (d) led to a penalty because of fraud, (e) resulted in a successful prosecution for fraud and (f) led to a custodial sentence on the grounds of fraud in each year since the credit began. [107426]

The Inland Revenue undertake investigations into tax credit claims where there are grounds for believing that the claim may not be compliant; non-compliance may cover a range of circumstances including error, negligence or fraud. On that basis, the information is as follows:

1999–2000 (6 months)

2000–01

2001–02

2002–03

Penalties imposed (d)3(1) 235(1) 512(1) 1,232
(2) 0(2) 2(2) 12(2) 26
Successful Prosecutions (e)(1) 0(1) 2(1) 29(1) 34
(2) 0(2) 0(2) 0(2) 1
Custodial Sentences (f)(2) 0(2) 0(2) 0(2) 0

Note:

In relation to each category (a)—(f) above, the upper line shows the figures for Working Families' Tax Credit and the lower line the figures for Disabled Pension's Tax Credit.

Awards selected for inquiry with applicant in the period

Inquiries completed in the period

Separate figures are not available for WFTC and DPTC

Penalties imposed in the period

Prosecutions completed in each period (including prosecutions of serving members of the Inland Revenue)

Custodial sentences given

To ask the Chancellor of the Exchequer pursuant to his answer of 5 March 2003, Official Report, column 1065W, on working families tax credit, how many families in receipt of the working families tax credit received it via their employer immediately prior to the phasing out of this option in August 2002. [107553]

There were 890,000 recipients of WFTC or DPTC at 26 August 2002 who had their award paid, or were due to have their award paid, via their employers.

To ask the Chancellor of the Exchequer (1) what the average length of time taken by the Inland Revenue to process each application for (a) Children's Tax Credit and (b) Working Tax Credit has been since 1 October 2002; [107554](2) how long it takes on average from receipt of application to determination of application for

(a) Child Tax Credit and (b) Working Tax Credit; and how many application forms in each case have had to be returned because of incompletion. [108030]

[holding answer 8 April 2003]: Claims for the two new tax credits—Child Tax Credit and Working Tax Credit—are processed as quickly as possible. A meaningful average of the time taken to reach a decision on the claim is not available, because the new tax credits have only just been introduced. Preparations over the last few months, starting with the invitation to make claims, have been designed to support the aim of setting up awards in time for payment in April, wherever possible. Where claims are incomplete, the Inland Revenue attempts to contact claimants for the missing details. Claim forms themselves are not normally returned.

To ask the Chancellor of the Exchequer what action he is taking to overcome delays in processing claims for the working tax credit and children's tax credit. [107580]

From 6 April 2003, the children's tax credit is replaced by child tax credit. Claims to child tax credit and working tax credit are being processed as quickly as possible, with the aim of getting awards set up in time for first payments in April. Inland Revenue began making payments this week—the first week of the tax year.

To ask the Chancellor of the Exchequer how many applications the Inland Revenue has received for (a) child tax credit and (b) working tax credit; how many applications for (i) child tax credit and (ii) working tax credit have been determined. [108029]

[holding answer 8 April 2003]: Claims for child tax credit and working tax credit are made at the same time, using one form. There is a single calculation to arrive at the amount of tax credits payable. By 9 April the Inland Revenue had received over 3.9 million claim;. Claims are being processed to ensure that wherever possible a decision to pay is taken in time for payment of any tax credits in April.

To ask the Chancellor of the Exchequer how many staff are involved in processing applications for Child Tax Credit and Working Tax Credit; and what changes to the number of staff have been made to reflect demand. [108063]

[holding answer 8 April 2003]: The introduction of the Child Tax Credit and the Working Tax Credit represents a large one-off piece of work for the Inland Revenue. That work includes handling telephone inquiries and processing claims, and it involves several thousand staff. As a one-off exercise, call handling and claims processing are effectively being managed as a single stream of work—allowing resources to be allocated across the two in the light of changing workload priorities. The balance between answering calls and processing claims is kept under constant review. In response to recent increased demand, resources have been switched to answering calls.

To ask the Chancellor of the Exchequer what estimate he has made of the number of people entitled to the (a) working tax credit and (b) child tax credit. [108064]

[holding answer 8 April 2003]: I refer the hon. Member to the answer I gave my hon. Friend the Member for Leigh (Andy Burnham) on 17 December 2002, Official Report, column 733W.

To ask the Chancellor of the Exchequer when he expects that the Inland Revenue will be in a position to make available to employers the information necessary to enable them to process employees' entitlement to the (a) Child Tax Credits and (b) Working Family's Tax Credits due from the start of the new financial year. [108229]

[holding answer 9 April 2003]: From 6 April 2003 two new tax credits—Child Tax Credit and Working Tax Credit—were introduced to succeed the existing tax credits including Working Families' Tax Credit. The Child Tax Credit and the child care element of Working Tax Credit are paid directly to the person in the family mainly responsible for looking after the children. Employers are not involved in making these payments. The Working Tax Credit is paid to employees with their wages, but decisions on entitlement are made by the Inland Revenue. The Department has already begun notifying employers of the amount of tax credits to be paid to employees entitled to Working Tax Credit.

To ask the Chancellor of the Exchequer (1) how many applications for working families tax credit were processed (a) within one month, (b) within two months, (c) within three months, (d) within six months and (e) in more than six months from the time each application was made, in each year since it was introduced; and if he will make a statement; [108827](2) what the average length of time was for an application for working families tax credit to be processed, in each year since it was introduced; and if he will make a statement. [108826]

[holding answer 11 April 2003]: The available statistics on the length of time to process applications for working families' tax credit are shown in The Board of Inland Revenue Annual Reports for each year (for 1999–2000, on page 100; for 2000–01, on page 113; for 2001–02 on page 124).

To ask the Chancellor of the Exchequer to which passported benefits recipients of the different tax credits are entitled; and what other conditions for receipt apply in each case. [108920]

[holding answer 11 April 2003]: There are a wide number of other benefits that claimants may be able to access if they are getting tax credits. Eligibility for those benefits depends not only on the type of tax credit award they have and their income but also on satisfying the relevant additional entitlement criteria. Those criteria are set by the Departments responsible for the benefits in question.To help claimants understand what they may be entitled to, the Revenue will shortly be publishing a leaflet on their website with information on the main additional benefits available anti contact details to help claimants find out more about entitlement to particular benefits. I would be happy to provide a copy to the Library as soon as it is available in paper form.

To ask the Chancellor of the Exchequer how many parents in Hendon are estimated to be entitled to children's tax credit; how many are claiming children's tax credit; and if he will make a statement. [109023]

700,000 families with children in London are expected to receive the child tax credit.