CIOT on tax credits: Campaigners urge HMRC to educate claimants to reduce errors
Speaking ahead of the publication of the Public Accounts Committee report on ‘HM Revenue & Customs: tax credits error and fraud’ (to be published Wed 22 May), Anthony Thomas, Chairman of the Low Incomes Tax Reform Group, said:
“HMRC have been stepping up their investigations into tax credit claims. A common failing of such investigations so far has been a one-size-fits-all approach which tends to ignore the subtleties of a highly complex system, leading to far too many claimants being deprived of entitlements which are rightfully theirs.
“Of the total amount attributable to ‘fraud and error’ in tax credits, about two-thirds is accountable for by error, one-third by fraud. Yet HMRC’s strategy is almost exclusively reliant on anti-fraud measures. A more productive approach, and one that would enable HMRC to achieve its targets more effectively, would be to devote more resources to educating claimants to avoid error in the first place.
“HMRC must also pay more attention to analysing where they themselves make mistakes in administering the system (official error), a problem about which they remain in denial.”
Notes for editors
1. The Low Incomes Tax Reform Group (LITRG) is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.
2. The Chartered Institute of Taxation (CIOT) is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.
The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.
The CIOT’s 16,800 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.