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Monday, 14 July 2008

£1.54bn tax credits 'paid in error'

"Tax credits are still open to "significant" fraud and error, a Whitehall spending watchdog warned as it refused to sign off the accounts for the sixth year in a row.
The National Audit Office (NAO) said up to £1.54 billion was wrongly paid out by HM Revenue and Customs (HMRC) in 2006/7 despite Government efforts to combat the problem."

Could it be the design of the tax credit system accounts for the amount of fraud and error - and that is just the fraud and error they know about. Having a system that normal mortals could understand would be a good start, or scrap it, obviuosly.


  1. More cynical people than me might suggest that an amount of fraud is left unchecked to boost the benefits of likely labour voters and make it less likely for them to vote for a change.

  2. Substantially raising the personal allowance and bringing more out of the tax bracket is an alien concept to those on the left. They need the dependency culture to garner votes. Why on earth those people vote for them is beyond me. It is as if they want to be condemned to a life of misery.

  3. Andrew,

    I disagree with taking people out of tax. My preferred system would see everybody paying some tax, even if their only income is from the state. That way they feel the pain of being a taxpayer. If people are not taxpayers, then they don't think tax has anything to do with them.

  4. Marksany, re your last point, of course you are right on a purely intellectual level. Assuming we are to have redistribution (and I think you should) then everybody should get the CBI and everybody should pay the same flat rate of tax.

    But politically, you have to go with people like Andrew Allison - you appeal to them by saying you'd increase the personal allowance - and you appeal to lefties by saying you'd reduce benefits means testing to no more than the basic rate of tax plus Employee's NI.

    This circle is squared by giving people a choice between a) a CBI and no personal allowance and b) No CBI and a more generous personal allowance. Whichever you choose, you pay tax at the same rate.

  5. They’re at it again - The liberal paternalists are proposing to ban the display of tobacco in shops and are currently soliciting the opinion of their electorate.

    Banishing cigarettes will cost ordinary taxpayers more money, inconvenience thousands of consumers, and threaten the livelihoods of shopkeepers all over the UK.

    I’m sick and tired of more of the same from Nanny - obsessed with dictating how people live their lives but sweeping the big issues, like knife crime and recession, under the carpet. They’re planning to hide tobacco, and they are already policing alcohol, red meat, fatty foods, and salt to name a few.

    I’m sick of seeing pubs closing down where I live. I’m sick of being made to feel guilty because I eat and drink as I please.

    I’m sick of Nanny. How about you? Register your support – Say NO to the Nanny State