Tax Credit chaos hits 5,500 York families (York Liberal Democrats)

York Liberal Democrats <info@yorklibdems.org.uk>

Tax Credit chaos hits 5,500 York families

May 31, 2006 5:00 PM

Cllr Ceredig Jamieson-Ball (City of York Council Executive Member for Social Inclusion and Youth) has today called for a total overhaul of the way tax credits are awarded after new figures revealed that 5,500 families in the City of York Council area are still being forced to payback over £4.3 million worth of tax credits, due to overpayments made by HM Revenue and Customs.

Cllr Jamieson-Ball said "It is simply unacceptable, that one year on, over £4.3 million of tax credits in the City of York Council area are still being overpaid. In some areas, the situation is getting worse not better.

"Last May, the government claimed that the system was working well for the vast majority of families. But today's figures show that to be a dubious claim - in actual fact nationwide 44%, over 2.8 million people, received incorrect tax credit payments.

"The Minister has known of the failures in the tax credit system for years and today's figures are yet more evidence that too little has been done to put this right. Recent changes to the system are too little, too late.

"The continued overpayment is a serious problem for families on low incomes, as the stress of having payments stopped overnight and paying back large sums can be considerable. I myself was overpaid tax credits a few years ago, and I am still repaying the debt. The system of tax credits is unbelievably complicated - it is time an easier and more transparent system was introduced."

ENDS

In the City of York Council area, there were a further 2,700 households who were underpaid a total of £1.7 million. This could have caused considerable hardship for some.

Figures are from the HM Revenue and Customs report 'Child and Working Tax Credits Statistics - Finalised Awards 2004/05'.