Real time information must be used with care and not uncritically

The Government announced today that HMRC’s Real Time Information (RTI) system is to be used by the Department for Work and Pensions (DWP) to reduce fraud and error in benefits.

HMRC have enjoyed some success with RTI, although it is not without its faults. The data from the system is already used when HMRC check tax credit awards and by DWP when they process universal credit claims. Today’s Budget announcement sees this use of RTI extended to track other benefit payments.

LITRG Chairman, Anthony Thomas, said:

“We welcome this measure to the extent that it can reduce the number of incorrect benefit payments and the distressing overpayment problems they can bring. We do however urge caution because RTI data is based on a different measure of income from the benefits it is used to check. We are already seeing such discrepancies arising between RTI data on the one hand and both universal credit and tax credits on the other, causing officially-generated errors in setting awards. When using RTI data to check benefit awards, therefore, the Department must act with care and not uncritically.

“We would also like to see RTI used to look out for underpayments, not just overpayments, so that claimants get the right payments that they are due.”

Notes for editors

Low Incomes Tax Reform Group

The 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.

The 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. The CIOT’s 17,600 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.