Increase in fraud and errors in tax credits system

Author: PA

Despite HM Revenue and Customs being set a target to cut the rate to 5% by
2011, a survey of 4,100 cases found it went up last year from 7.8%.

In a statement, Treasury Financial Secretary Stephen Timms said HMRC was
taking action to reduce fraud and error and “will use the analysis published
today to refine its strategy further”.

Detailed figures released by HMRC showed the 8.6% figure, which covers the
2007/8 financial year, was the lowest estimate of a range which put the
level at up to 10.6%.

That equates to between £1.75 billion and £2.12 billion, of which up to 50,000
cases of fraud accounted for between £100 million and £200 million.

Mr Timms said HMRC had introduced “additional checks and interventions
tailored to help prevent error entering the system whilst ensuring those who
abuse the system are caught”.

“HMRC has also been embedding this deeper understanding of customer behaviour
into its entire compliance programme, deploying resources to areas of
greatest risk,” he told MPs in a written Commons statement.

“By helping customers to get their claim right from the outset, and to keep
their award on track, HMRC is reducing the risk of loss and improving
customer service.”

Anti-fraud issues included tighter control on the issue of claim forms, fraud
awareness training for staff, deploying compliance officers in call centres
and intelligence sharing across Whitehall, he said.

Those caught faced a fine and possible prosecution, he said.

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