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3 Dec 2018

HMRC think tax credit fraud will rise!

HMRC is struggling to control tax credit fraud and the “cracks are showing”, MPs have said. Error and fraud in tax credits cost the taxpayer £1.3bn in 2016-17 alone, and the department expects the rate of overpayments to grow further, the Public Accounts Committee found.

The committee said it was “disappointing” that HMRC says it will be unable meet its target of keeping error and fraud below 5% of tax credit payments. HMRC expects the fraud and error rate to rise to 5.5% in 2017-18 and to 6% in 2018-19.

Meg Hillier, chair of the PAC, said: “HMRC is under pressure and in some areas the cracks are showing. The authority expects fraud and errors in tax credits to exceed its target in successive years, driven in part by policy changes that have effectively removed HMRC’s incentive to bring fraud and errors under control".

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