Tackling Tax Credits Error and Fraud

Download or read book Tackling Tax Credits Error and Fraud written by Great Britain: National Audit Office and published by The Stationery Office. This book was released on 2013-02-14 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: HM Revenue & Customs has improved its approach to tackling error and fraud in tax credits but has not yet achieved a sustainable reduction in the level of losses. In 2009, HMRC announced a target to reduce error and fraud to 5 per cent by 2010-11, down from 9 per cent. HMRC missed this target. Error and fraud losses for 2010-11 were just over 8 per cent, amounting to almost £2.3 billion, around £850 million higher than if HMRC had achieved the target. HMRC has been innovative in how it tackles error and fraud, developing a wide range of activities to tackle specific types of risk and monitoring their effectiveness. HMRC believed it was on track to meets its target, but had overestimated the impact of its activities to tackle error and fraud. It estimated that it had prevented £1.4 billion of error and fraud in 2010-11, but has revised this to under £500 million. HMRC has not yet developed an effective response to stop error and fraud recurring after it has corrected a claim. It has also been less effective in tackling certain types of risk, such as the misreporting of hours worked by claimants. Despite HMRC increasing the number of checks to tackle error and fraud, there remain a substantial number of incorrect awards at the end of each year. In 2010-11, in the case of 1.4 million awards, claimants were paid more than they were entitled to