TAX CREDITS FIASCO

The recent revelations, by the Government, that the Inland Revenue has overpaid millions of pounds in tax credits is news that will make many hard working families in and around Neath and Port Talbot cringe and think twice. In an area like Neath and Port Talbot where the average income is below that of the national average there are bound to be several thousand families in receipt of either working families tax credit or child tax credit.

The official explanation from the Inland Revenue is that the tax credit system is overly complicated but the Government response that the recent overpayments were less this year than last year will do nothing to ease the worry of many families who are now facing the prospect of having to pay back the amount they were overpaid.

The Government has recently announced that those families who can “PROVE” that they were not aware of the overpayment will not be forced to repay the extra money that they have received.

Aberavon and Neath Liberal Democrats pose the following questions:


1. If the Civil Service tax professionals at the Inland Revenue don’t understand the tax credit system how does the Government expect ordinary families to understand it?

2. Moreover, how on earth does the Government expect anybody to realise whether they have been overpaid or not?

It would seem that the best option would be to write off the overpayments and ensure that the same mistakes are not made in future years.

- Richard Northcote 28 June 06