(2) how many and what percentage of tax credit claimants have been underpaid more than once since their claim began.
Tax credits are designed to be responsive to changes in a family's circumstances There will be an under or overpayment at the end of the year if changes are not reported or processed promptly. The Government announced a package of measures at the Pre-Budget Report 2005 to ensure the system strikes the right balance between providing a stable award and maintaining the ability to respond to changes. Once fully implemented this package is expected to reduce the level of overpayments by around a third.
The number and proportion of tax credit awards with more than one overpayment or underpayment, between 2003-04 and 2005-06, is detailed in the following table:
Years in which overpayment or underpayment occurred Number of awards with more than one overpayment Number of awards with more than one underpayment 2003-04 and 2004-05 528 100 2004-05 and 2005-06 404 134 2003-04 and 2005-06 227 78 2003-04, 2004-05 and 2005-06 260 28 Total 1,419 340 Proportion of all tax credit awards in 2003-04, 2004-05 and 2005-06 (percentage) 18 4