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Small Business News
HMRC Reduces Tax Credit Overpayments
HMRC yesterday published National Statistics on finalised tax credit awards for 2007-08 which show a reduction in overpayments from breathtaking to shocking.
The statistics show that the level of overpayments in 2007-08 was £1 billion compared to £2.2 billion in 2003-04. The number of families entitled to end of year top ups has increased as anticipated last May to 1.29 million (£798 million). This is as a result of one of the components of the package of measures announced in the Pre Budget Report 2005 to reduce overpayments.
The statistics also show that in 2007-08:
- 5.98 million families benefited from tax credits
- families received more support from tax credits with the average tax credit award increasing by £200 to £3,611 per year compared with 2006-07. This does not take into account further increases in the child element of £390 and in the basic element of the working tax credit of £160 from 2007-08 to 2009-10;
- more working people on low incomes without children received tax credits, with 336,000 receiving support through the working tax credit, up by 10 per cent. on 2006-07;
- 414,000 families benefited from the childcare element of the working tax credit, an 8 per cent. increase compared with 2006-07; and
- 108,000 families benefited from extra help for workers with a disability a 9% increase compared to 2006-07.
Whilst the reduction in overpayments is undoubtedly a positive trend, the 2007-2008 figure of £1 billion is still a shocking one, that will unfortunately go largely unnoticed as the current political turmoil in the House of Commons dominates the news.
by: Editor
20th May 2009
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