Attention to detail is something that UK politics tends not to be that good at. However, as always, the devil is in the details.

Tax Credits have a number of benefits compared to the previous Family Credit system in that they allow an immediate response to changed circumstances. However, Family Credit was constant for 6 months and the certainty also has merit.

There is a finely balanced argument as to which is the better result. The problem with Tax Credits is that the delays in responding to changed circumstances cause situations in which people are overpaid and then need to repay the tax credits.

People make the assumption that they are due the money that they are paid and many families are unable to cope easily with a situation in which they are suddenly required to pay back money they thought was rightly theirs.

There is one aspect of Tax Credit overpayments that has not had the attention that it deserves. Within the Statutes there is a term that basically is intended to ensure that at a certain point the Tax Credit account is closed and cannot be revisited. This means that an annual return figure is agreed and basically cannot be changed later.

The problem with this is that HMRC have established guidelines that decree that anyone that fails to return their annual return on time has to pay all the tax credits back. Even a days delay means they have to pay it all back.

Again it is worth taking a few moments to work out what is happening. Alistair and Gordon are giving a family some money. The family is supposed to send a note saying that they agree the sum paid. If the note gets lost in the post they are asked to pay all the money back.

This is surreal. There are no other circumstances I am aware of where the failure to get a return in on time results in all monies being paid back. If we don’t get our tax returns on on time we don’t suddenly get all the tax back what we get instead is a £100 fine.

The damage this does to household finances is immense. I solved this issue for one of my constituents through using the threat of judicial review. However, it remains a problem for a lot more people.

I thought it would be useful to find out how many people it affects. So I asked “how many payments of child tax credit have involved overpayment because of a failure by HMRC to record the return of an annual declaration.”, but got the answer “There should be no overpayments arising because of a failure by HMRC to record the return of an annual declaration.” Typical evasion.

So I asked again “how much tax credit has been overpaid as a result of the claimant not providing an annual return to HMRC … and how many people were overpaid.” And got the answer “The information requested is available only at a disproportionate cost.” Refusing to answer.

We tried Freedom of information and got “the information is not held at this level”. This is a typical cover up. The government are doing something embarrassing that they want to hide so they refuse to reveal how many people are affected.

This is a good example of how the culture of evasion and refusing to answer questions causes bad government. Clearly this needs to change.

If you need advice and support with Tax Credits go to www.taxcc.org the only place to get the truth behind this failed system.

Red Rocket