George Osborne has told his fellow MPs that HMRC stopped £1 billion of incorrect or fraudulent tax credit payments in the last financial year.
The Chancellor also said the Revenue’s new strategy for error and fraud will save a further £1 billion this year. HMRC now makes it much more difficult for people to defraud the system and additional checks are made to prevent customers receiving incorrect payments.
HMRC actually beat its £1 billion target for 2010/11 and stopped £1.05 billion being paid out incorrectly. That’s a 60% increase in one year alone.
Mr Osborne went on to explain that the coalition is committed to reducing the amount of benefit money that is lost to error and fraud. The Revenue’s achievement means waste is cut out and tax credits are only paid to those who are entitled to them. HMRC now checks claimants’ statements on hours worked in self-employment or employment, children and childcare.
In the last financial year, HMRC conducted 1.8 million claim checking “interventions”. In the previous year it carried out just 1 million. As well as stopping fraudsters receiving tax credits, the increased interventions mean that genuine claimants do not receive money in error which later has to be repaid.
At the end of last year it was revealed that as much as £400 million every year is overpaid to parents and contractors who fail to notify HMRC when changes to childcare costs occur. Failure to notify the Revenue about changes in the amount spent on childcare could be considered a fraud and offenders liable to prosecution.
© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.
Image: H.A.L. 9000 by Reportergimmi
