Skip to main content

Tax Credits

Volume 447: debated on Monday 19 June 2006

To ask the Chancellor of the Exchequer how many letters have been received by the Tax Credits Office in each month since October 2005; and if he will make a statement. (75002)

[holding answer 7 June 2006]: The volumes of items of post1 that HM Revenue and Customs’ Tax Credit Office (TCO) received in each of the months since October 2005 was around:

1 These will include changes of circumstances and renewal forms.

Items received

2005

October

281,000

November

241,000

December

215,000

2006

January

211,000

February

233,000

March

257,000

April

167,000

May

254,000

To ask the Chancellor of the Exchequer what the accuracy level of tax credits processing was in each year since 2003-04; and if he will make a statement. (75772)

For 2003-04, I refer the hon. Member to the answer I gave on 11 July 2005, Official Report, column 698W.

Performance for 2004-05 was published in the departmental accounts for the year ended 31 March 2005 which are available on the HM Revenue and Customs (HMRC) website at: http://www.hmrc.gov.uk/about/reports.htm.

Indicative results for the Department’s performance for 2005-06 will be published shortly in HMRC spring departmental report 2006.

To ask the Chancellor of the Exchequer (1) what assessment he has made of the reasons for the tax credit overpayments in 2004-05; how many of these involved official error; and if he will make a statement; (76416)

(2) how many tax credit overpayments involving official error have been made since April 2003; and in how many of these cases the overpayment has been written off.

For information on number of overpayments involving official error, I refer the hon. Member to the answer given on 12 January 2006, Official Report, column 772W.

For causes of overpayments I refer the hon. Member to my written statement of 5 December 2005, Official Report, columns 55-56WS.

The amount of 2003-04 overpayments written off due to official error can be found in the Comptroller and Auditor General’s Standard Report on the Accounts of the Inland Revenue 2004-05, which is available on the HMRC website: http://www.hmrc.gov.uk/about/ir-report2005.pdf

To ask the Chancellor of the Exchequer (1) which of the recommendations made by the Parliamentary Ombudsman in her report on Tax Credits: Putting Things Right had been (a) implemented, (b) accepted but not implemented, (c) rejected and (d) considered for implementation by 31 May 2006; and if he will make a statement; (76427)

(2) if he will make a statement on plans to implement the recommendations in paragraph 5.17 of the Parliamentary Ombudsman’s June 2005 report on tax credits.

HMRC have responded positively to the Ombudsman's report. For example:

HMRC have improved guidance to staff on the availability of interim payments.

Suspension of recovery on disputes was introduced in November 2005.

A revised award notice including a single page check sheet to help claimants with their award notice were introduced from April 2006. The check sheet includes a section on overpayments and highlights the availability of additional tax credits payments.

The Code of Practice on overpayments (COP26) was revised earlier this year and now provides a clearer statement of what is meant by the reasonableness test in official error cases.

From November 2006 the tax credits computer system will limit any in year adjustment to the cross year recovery limits as detailed in COP26. The Tax Credit Office have a manual process to effect requests in the interim.

In respect of recommendation 10, current policy is for overpayments to be written off where there was a mistake by HMRC and it was not reasonable for the claimant to have spotted the error. The Government believe this strikes the right balance between being fair to those claimants who have been paid the incorrect amount and being fair to the taxpayer in general.

To ask the Chancellor of the Exchequer how many staff were employed by (a) the tax credits office and (b) the tax credits hotline in each month from September 2005 to March 2006; and if he will make a statement. (62787)

For the number of full-time equivalent (FTE) staff employed in Tax Credit Office (TCO) at the end of September 2005, I refer the hon. Member to the answer I gave him on 7 December 2005, Official Report, column 1326W.

(a) The number of FTE staff in post in the TCO at the end of October 2005 to the end of February 2006 inclusive was around:

Staff number (FTEs)

Month

Number

2005

October

2,800

November

2,800

December

2,800

2006

January

2,800

February

3,000

March

3,100

(b) HMRC estimates of the number of full-time equivalent staff employed on tax credit helplines, in each month from September 2005 to March 2006 are detailed in the following table. In addition HMRC can use up to another 1,350 staff (FTEs) to answer tax credit calls at peak times.

Staff number (FTEs)

Month

Number

2005

September

3,400

October

3,400

November

3,400

December

3,400

January

3,200

2006

February

3,300

March

3,350