Tax campaigners welcome Tax
Credits review announcement
THE Low Incomes Tax Reform Group (LITRG)
have welcomed HMRC's commitment to carry out a review of all summer 2016
decisions made by Concentrix that have not already been challenged by claimants
and to improve their compliance processes for 2017 and beyond.
In December 2016, the House of Commons Work and Pensions Committee supported LITRG's
call for an independent review of Tax Credit compliance processes following
significant delays and difficulties faced by Tax Credit claimants trying to deal
with Concentrix, the private company hired by HMRC to carry out Tax Credit
checks on their behalf. This led to HMRC terminating the contract with
Concentrix early and taking back outstanding cases.
The Committee's report acknowledged the serious customer service failures by HMRC and Concentrix but also highlighted other flaws in the compliance processes
that left claimants facing:- 'a decision making system stacked against them.'
The Government's response to that report, commits to carrying out a review of
the remaining cases where Concentrix amended or terminated a Tax Credit Award,
but where the claimant did not request a mandatory reconsideration (the 1st
step in the appeals process). Although they have not gone as far as
commissioning an independent review of Tax Credit compliance processes, HMRC
have committed to closely examine their processes to ensure that the issues that
arose last year are not repeated.
Anthony Thomas, Chairman of LITRG said:- "We welcome the HMRC commitment
to review all of the summer 2016 Concentrix decisions that have not already been
appealed. We would strongly recommend that other Concentrix decisions, as well
as HMRC's own compliance decisions, should be similarly reviewed where the same
flawed processes were followed.
Whilst it is disappointing that HMRC will not be commissioning an independent
review, we are pleased that HMRC have committed to improving the processes for
2017, including giving consideration to further safeguards before payments are
altered or suspended. HMRC will be involving their independent stakeholder
group, of which LITRG are members, in this work and we very much look forward to
working with HMRC to ensure all parts of the process are closely examined and
significant improvements made.
HMRC have a duty to ensure that people are paid the right amount of Tax Credits
and checking claims is an important part of this process. HMRC have so far
tackled error and fraud in the Tax Credits system by investigating claims after
payments have been made and have repeatedly missed opportunities to educate
claimants and to design processes that stop error entering the system in the
first place. We welcome HMRC's response that acknowledges this and commits to
exploring options over the next 12 months to shift the focus of compliance
activity to education and preventing error and fraud at the point of entry to
What happened in 2016, where vulnerable Tax Credit claimants were left without
essential payments to which they were legally entitled, cannot be allowed to
happen again. HMRC's commitments in response to the Work and Pensions Committee
are a good start in preventing a repeat, but there is still much work to be done
in order to improve the claimant journey and ensure that the decisions made are
the right ones based on sound evidence."