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Tax Credits

Volume 449: debated on Wednesday 19 July 2006

To ask the Chancellor of the Exchequer (1) how many disputed tax credit overpayment requests have been received in each quarter since April 2004; how many requests have been upheld; and if he will make a statement; (75746)

(2) how many overpayments of tax credits have been written off due to acceptance by his Department of official error since April 2003; and if he will make a statement;

(3) how many tax credit claimants have (a) returned form TC 846 and (b) otherwise been recorded as requesting the write-off of their overpayments on grounds of official error for each month since April 2003; and if he will make a statement;

(4) what his latest estimate is of the proportion of tax credit overpayments due to official error in each year since 2003-04; and if he will make a statement;

(5) how many people have appealed against tax credits overpayments recovery in each month since April 2003; how many appeals have been successful; and if he will make a statement;

(6) what proportion of tax credits overpayments have been written off for (a) 2003-04, (b) 2004-05 and (c) 2005-06.

For the number of disputed tax credit overpayments the Tax Credit Office (TCO) received, and the number written off between May 2004 (when the Department began recording disputes received) and January 2006, I refer the hon. Member to the answer I gave the right hon. Member for Birkenhead (Mr. Field) on 1 March 2006, Official Report, column 727W and the answers I gave him on 19 January 2006, Official Report, columns 1496-97W and 6 July 2005, Official Report, column 437W.

The TCO received around 39,000 disputed overpayments in February 2006, around 33,000 in March 2006 and around 26,500 in April 2006.

The number of overpayments where the overpayment was successfully disputed, that is, where the overpayment was written off in full or in part by the TCO because of official error, was around 2,000 in February 2006, around 1,500 in March 2006 and around 100 in April 2006.

The figures for overpayments written off do not directly relate to those disputes that were received in the same month.

The figures for May 2006 are not yet available.

To ask the Chancellor of the Exchequer (1) how many compensation payments have been made by the tax credits section of his Department in each reporting period since April 2003; what the value of each payment was; and if he will make a statement; (75769)

(2) how many compensation payments for maladministration and poor service have been made by the tax credits section of his Department for each month from April 2003 to May 2006; and if he will make a statement.

The circumstances in which the former Inland Revenue and Her Majesty’s Revenue and Customs will make compensation payments to its customers are explained in the Department's code of practice 1, “Putting Things Right', which is available at:

www.hmrc.gov.uk/leaflets/cop1.pdf

The Department will pay compensation for reasonable costs incurred as a direct result of their mistakes or delays and to recognise worry and distress caused by those mistakes and delays. A breakdown of the reasons why payments are made is not available.

For 2003-04, 2004-05 and the period April to September 2005 inclusive, I refer the hon. Member to the answers I gave him on 7 February 2005, Official Report, columns 1244-45W and 15 November 2005, Official Report, column 1212W. A monthly breakdown for the period April to December 2003 is not available.

The number of payments made in each month from October 2005 and May 2006 (inclusive) were:

Number

2005

October

1,099

November

1,087

December

1,218

2006

January

1,240

February

1,012

March

884

April

366

May

661

Information about the value of each payment is available only at disproportionate cost.

To ask the Chancellor of the Exchequer what his latest estimate is of the cost of the £2,500 tax credits income disregard in (a) 2004-05 and (b) 2005-06; and if he will make a statement. (75780)

Estimating the cost of the disregard would require estimates of behavioural effects associated with the disregard and estimates of the cost of the recovery of the additional overpayments that would have been incurred in the absence of the disregard. Neither of these are available.

However, as stated in the NAO Standard Report of the HM Revenue and Customs 2005-06 Accounts Trust Statement we estimate that the final aggregate entitlement to child and working tax credits for 2004-05 would have been about £700 million lower without the £2,500 income increase disregard.

No reliable equivalent estimate for 2005-06 is yet available, as most 2005-06 tax credit awards have not yet been finalised.

To ask the Chancellor of the Exchequer how many staff there were in the Tax Credits Directors Complaints Team in each quarter since April 2003. (76470)

Separate information on the number of staff that worked on the Tax Credits Director's Complaint's Team is not available.

To ask the Chancellor of the Exchequer how many tax credit awards were terminated as a consequence of couples separating in each quarter since April 2003; and if he will make a statement. (76870)

By 3 April 2006, 435,000 tax credit awards had ceased as a result of couples reporting a separation. The analysis by each quarter is as follows:

Quarter in which separation occurred

Number of awards ceased as at 3 April 2006 (Thousand)

6 April 2003 to 5 July 2003

28

6 July 2003 to 5 October 2003

36

6 October 2003 to 5 January 2004

32

6 January 2004 to 5 April 2004

30

6 April 2004 to 5 July 2004

30

6 July 2004 to 5 October 2004

40

6 October 2004 to 5 January 2005

42

6 January 2005 to 5 April 2005

47

6 April 2005 to 5 July 2005

36

6 July 2005 to 5 October 2005

42

6 October 2005 to 5 January 2006

38

6 January 2006 to 3 April 2006

34

Total

435

To ask the Chancellor of the Exchequer on how many occasions HM Revenue and Customs have intervened where they suspect a claim by an individual from another EU country claiming tax credits in the UK may be (a) wrong and (b) fraudulent. (77591)

To ask the Chancellor of the Exchequer what estimate he has made of (a) tax credit overpayments to migrant workers who have returned to their home country and (b) the proportion of these monies which will be recovered; and if he will make a statement. (78153)

To ask the Chancellor of the Exchequer how many cases of tax credit fraud on the basis of non residency have been uncovered in each of the last five years; what the cost has been in each year of this fraud; what estimate his Department has made of the extent of undiscovered fraud of this kind; and if he will make a statement. (80559)

To ask the Chancellor of the Exchequer (1) whether child tax credit call centres are obliged to inform claimants that they need to complete an application form in order to have their change of circumstances logged; whether staff at child tax credit call centres automatically send the relevant application form to claimants who call in order to have their circumstances changed; if he will take steps to enable child tax credit claimants who did not receive the tax credit due to not being informed by the call centres that they needed to complete an application form to claim their full tax credit; and if he will make a statement; (77661)

(2) if he will take steps to enable child tax credit claimants who did not receive the benefit due to not being informed by the call centres that they needed to complete an application form to claim their full benefit; and if he will make a statement.

Tax credits claimants are encouraged to notify changes in their circumstances by providing details over the phone to the tax credits Helpline although changes may also be notified in writing to the Tax Credit Office. No prescribed form is required.

To ask the Chancellor of the Exchequer (1) how many tax credit awards were made to (a) people subject to immigration control, (b) asylum seekers, (c) foreign students, (d) illegal immigrants and (e) foreigners on expired visas in each quarter from April 2003 to June 2006; what the cost of these awards was in each case; and if he will make a statement; (77895)

(2) what estimate he has made of the cost of the easement of tax credit verification rule 12 Residency Criteria not met between March 2003 and December 2004; and if he will make a statement;

(3) how many tax credit applications failed verification rule 12 Residency Criteria not met but were allowed to proceed to being processed in each month from April 2003 to January 2005; and if he will make a statement;

(4) in how many tax credit cases failures of verification rule 12 Residency Criteria not met were (a) investigated and (b) not investigated in each month since December 2004;

(5) which categories of tax credit claimant fail verification rule 12 Residency Criteria not met; and if he will make a statement;

(6) how many applications for tax credits failed verification rule 12 Residency Criteria not met between April 2002 and April 2003; and if he will make a statement;

(7) how many tax credit claims failed verification rules in each (a) month and (b) quarter since April 2002; and if he will make a statement;

(8) which (a) Minister and (b) official (i) recommended and (ii) approved the easement of tax credit verification rule 12 Residency Criteria not met in 2003; for what reasons it was introduced; and if he will make a statement;

(9) if he will place in the Library copies of each HM Customs and Revenue newsboard item relating to tax credits; and on what date each was posted;

(10) how many tax credit verification rules have been (a) suspended and (b) eased since August 2002; and for what (i) reasons and (ii) period in each case;

(11) whether the easement of tax credit verification rule 12 (residency criteria not met) meant that the provisions in the Tax Credit (Immigration) Regulations 2003 were not implemented; and if he will make a statement;

(12) what factors were taken into account when deciding not to investigate cases where tax credit verification rule 12 Residency Criteria not met was failed;

(13) whether an assessment of the (a) cost and (b) staffing levels required to meet the volumes of claims failing verification rule 12 Residency Criteria not met was made prior to the decision to ease the rule from April 2003 to December 2004; and if he will make a statement;

(14) how many awards of tax credits to people failing residency rules between April 2003 and December 2004 have been (a) recovered and (b) written off;

(15) what advice he received on the easement of tax credit residency rules; and on what dates the advice was given.

Tax credits follows the policy set by the Home Office, that those who have not established their right to remain permanently in the UK should not have welfare provision on the same basis as those whose citizenship or status here gives them an entitlement to benefits and assistance when in need.

For this reason, apart from specified circumstances set out in the Tax Credits (Immigration) Regulations 2003, persons subject to immigration control are not eligible for tax credits.

The cost of the easement is included within tax credit remissions disclosed in HMRC's published accounts. Where the department has identified payments made in error, it has terminated the award so there will be no future payments.

Code of practice 26 sets out HMRC’s established practice not to recover amounts paid out due to official error where the claimant could reasonably have assumed the payment was correct.

The remaining information requested could be produced only at disproportionate cost.

To ask the Chancellor of the Exchequer what difference the latest changes in the disregard for increases in income will make in tax credit entitlement of a family whose income has risen by (a) £2,500 and (b) £25,000; and what the criteria are for allowing the respective disregards. (80067)

From 2006-07, a family’s annual income can rise up to £25,000 between one year and the next without affecting their tax credit entitlement in the first year of increase.

The previous income disregard amount was £2,500.

To ask the Chancellor of the Exchequer how many of his Department's targets for tax credit administration were (a) met and (b) not met in each reporting period from 2003-04 to 2006-07; and if he will make a statement. (82831)

HM Revenue and Customs reports its performance against targets annually. Details can be found in the Board's Annual Reports for the relevant year. These are available at:

www.hmrc.gov.uk/about/reports.htm

Indicative results for 2006-07 will be available in the spring Report which will be published in 2007.

To ask the Chancellor of the Exchequer (1) how many recipients of tax credits in West Lancashire constituency are involved in disputes relating to overpayment; (83459)

(2) whether the tax credits MPs' hotline is able to make outgoing calls on request to contact constituents who are suffering problems with their tax credits; and how many cases of disputed tax credit payments there have been in West Lancashire since tax credits were introduced.

For information about the hon. Members' hotline I refer the hon. Lady to the answer I gave the right hon. Member for Birkenhead (Mr. Field) on 16 November 2005, Official Report, column 1237W.

Information about disputed tax credit payments and overpayments are not held at constituency level.

To ask the Chancellor of the Exchequer what assessment he has made of the level of fraud in the tax credit system in the last 12 months. (84929)

[holding answer 13 July 2006]: I refer the hon. Member to the statement I made to the House on 11 July 2006, Official Report, columns 1281-2. Also to the HMRC publications “Child and Working Tax Credits: Error and fraud statistics 2003-04” and “Tackling error and fraud in the Child and Working Tax Credits” available on the HMRC website at:

www.hmrc.gov.uk/news/index.htm