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Tax Credits

Volume 448: debated on Tuesday 4 July 2006

To ask the Chancellor of the Exchequer how much tax credit overpayment has been written off due to hardship in each quarter since April 2003; and if he will make a statement. (76489)

Audited details of new tax credit overpayments written off are compiled annually to the end of October. Available figures for overpayments written off due to hardship are shown in the following table.

£

Year to end of October

Amount written off

2004

0

2005

155,000

To ask the Chancellor of the Exchequer what procedures are in place to tackle fraud in the claiming of (a) research and development tax credits and (b) vaccines research relief; and if he will make a statement. (82153)

HM Revenue and Customs manages non-compliance through a process of risk assessment and deploys resources according to the risks identified.

As with other elements of companies' tax or computations, claims for R&D tax credits and vaccine relief research are subject to risk assessment procedures. When significant risks are identified they are pursued through a variety of interventions, one of which involves the opening of an enquiry into the company tax return or claim. If as a result of the inquiry a return or claim is found to be incorrect, steps will be taken to recover the tax due. In such circumstances interest will be charged and penalties will be considered where appropriate.

The document published at PBR “Supporting growth in innovation: next steps for the R&D tax credit” announced that HMRC would set up specialist units to handle all claims dealt with outside the Large Business Service. The new units are intended to ensure greater consistency in the handling of claims. This should include a more consistent and effective approach to tackling non-compliance.

Where serious fraud is identified the Department will adopt its normal civil or criminal investigation procedures.

To ask the Chancellor of the Exchequer what recent estimate he has made of the administration costs of (a) research and development tax credits and (b) vaccines research relief; and if he will make a statement. (82154)

I refer the hon. Member to the reply given to his previous question on 1 November 2005, Official Report, column 991W.