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Welfare Tax Credits: Overpayments

Volume 507: debated on Wednesday 17 March 2010

To ask the Chancellor of the Exchequer how many legal proceedings have been instigated for recovery of tax credit overpayments in each quarter since April 2003; what the average overpayment outstanding is for which legal action has been instigated; what the total monetary value is of such overpayments; what estimate he has made of the average cost to the public purse of pursuing such cases through the courts; and how much has been recovered through court action. (317146)

HM Revenue and Customs (HMRC) initiates court action only as a last resort.

The information requested is in the following table.

Tax credit cases entered into Court by HMRC

Number

Total Value (£)

Average Value (£)

2008-091

April-June 2008

1,090

7,649,000

7017

July-September 2008

2,623

18,032,000

6874

October-December 2008

887

6,465,722

7289

January-March 2009

1,719

10,889,145

6334

2009-102

April-June 2009

792

4,184,128

5282

July-September 2009

408

1,854,732

4545

October-December 2009

249

2,356,757

9464

Notes:

1 Includes England and Wales and Scotland

2 Includes England, Wales, Scotland and Northern Ireland

Information for 2006-07 and 2007-08 could be obtained only at disproportionate cost, as the data for these periods are not centrally held by HMRC's systems.

No estimate has been made of the cost to the Exchequer of pursuing tax debt through Court Proceedings.

Information of the amount recovered through court action is only available at disproportionate cost, as HMRC systems do not separately record the amount recovered as a result of court proceedings as distinct from the amounts recovered from all stages of the enforcement process.

To ask the Chancellor of the Exchequer in how many individual tax credit cases which involved overpayments made in (a) 2005-06, (b) 2006-07 and (c) 2007-08 the claimants were prosecuted by his Department for the purposes of recovering such overpayments in each year in which such prosecutions were initiated. (317581)

The recovery of tax credit overpayments is a civil matter. Therefore, HM Revenue and Customs (HMRC) does not prosecute but may seek action to recover tax credit debt through the county court system in England and Wales, the Sheriff's court in Scotland and the magistrates court in Northern Ireland. This is only done as a last resort.

For information on the number of actions commenced in 2006-07 and 2007-08 I refer the hon. Member to the answer given to the hon. Member for Cardiff Central (Jenny Willott) on 26 November 2008, Official Report, column 1926W. Information for years prior to 2006-07 is only available at disproportionate cost, as it is not centrally held by HMRC's systems.

HMRC can and does prosecute for fraud.