Tax credit database problems
ON February 26 last year, a manila envelope crammed full of documents arrived at a house on the Isle of Wight. Inside was a dossier that amounted to a detailed indictment of the tax credit fiasco that will cost the country as much as £2.8 billion.
The documents – and tapes of telephone conversations that arrived some weeks later – were obtained under data protection laws and detailed the tax credit claim of Simon Blackmore, 38. He was being pursued for £6,057 in tax credits.
“Screen grabs” of Blackmore’s case provide a snapshop of a system on the brink of chaos. Software glitches caused a series of errors on Blackmore’s files, including the wrong income details and the removal of his six-year-old daughter from some of the assessments. Faced with Blackmore’s dossier, HM Revenue & Customs (HMRC) relented last Thursday and told him he would no longer be pursued for the alleged overpayments of 2003 and 2004.
“Gordon Brown claims the tax credits system lifts children out of poverty,” said Blackmore. “Maybe it does, but only to plunge them and their families into debt two years later.”
Across the country, similar packages to Blackmore’s are dropping on doormats as the victims of the tax credit overpayment debacle fight back against the thousands of pounds of debts they have been saddled with. After the debacle of the loss of personal data of 25m people last year, HMRC now faces a backlash over its pursuit of 1.5m families to whom it overpaid tax credits.
Many of the documents show that errors previously blamed on the public were in fact the mistakes of tax credit officials and faulty computer software. The evidence means that significantly more of the billions of pounds in outstanding debt will have to be written off than previously thought. …