it seems to me that HMRC have shown themselves unfit to administer the tax credit scheme. they have the wrong departmental culture for it - they are a revenues collection department, and the tax credit scheme is an expenditure measure. they don't get it, and from where i'm standing, can't get it. it also seems clear to me that although they were charged with working on the scheme in consultation with the the DWP, they were set on deffing the latter out, prolly an 'empire building' thing... at any rate, neither the incoherent legislation they drafted, nor the actualite of delivery indicates that they took a blind word of notice of anything the DWP advised them of. i don't think they have any excuse for claiming, as they later did, that they were taken by surprise by the large number of changes in circumstances this low income 'client group' has. the DWP had readily available figures at their disposal...
HMRC is a most peculiar department - no Sec of State and some sort of off-shoot of the Treasury, and it appears is simply unaccustomed to accounting for or explaining its actions...i've noticed in Hansard that a lot of parliamentary questions are not answered by ministers - MPs are referred to arcane published tables of statistics, or told that the information can only be obtained at disproportionate cost, or that HMRC does not collect the date requested. figures for the 'technical' overpayments that have so vexed us are not distinguished from overpayments which are true losses to public funds.
the customer service group for reps has been a big disappointment - still a bunch of 'cut and paste' stock answers, just more paragraphs than the norm, and no engagement with points made in the letter being replied to - they just ignore...
the denial of the right of appeal ensures that their decision-making, such as it is, remains in-house and unchallenged, and that they are free of the benefit of wiser counsel - that 'benefit', i'm certain, they would see only as a burder, and that is why they have steadfastly resisted, and deny that there is any breach of human rights...
in operating its overpayment recovery policy, HMRC has, without any checks on its legality, reversed the burden of proof, approaching the issue as tax collectors, not as decision-makers on statutory entitlement. According to the commentary to the Tax Credit Act 2002, the question arose in the passage of the Bill as to whether tax credits counted as public expenditure or as tax uncollected, and the answer (after disagreement about the right approach) was that they counted as public expenditure in so far as they exceed the income tax due from the claimant, and as negative taxation in so far as they do not. The ball park figure, used in debates, was that 90% was public expenditure, and 10 % was tax foregone. tax credits in the 1999 Act (WFTC) were classed as publiic expenditure.
nearly all the cases i've seen involve either maximum CTC because means-tested benefits is in payment to the parent(s), or minimum pay is involved. (it's what is known as an area of high deprivation. they got that right! ) HMRC's recovery policy + a system which is counter-intuitive and unfathomable, with special HMRC definitions of words like 'overpayment' and 'claim' which differ from the commonly understood meaning, mean that they effectively have replaced statutory entitlement to payments for children, with a repayable loan of tax credits. who knew?
the policy reversal on separated etc couples is of course welcome, but implementation is patchy, and i've even had a letter where they lie to me about 'changes in legislation' from January 2010.
I am just in the process of writing to the Director - i'm tired og messing about with customer service. this is a case which should have benefited from both the 'genuine mistake' about household status provision in COP 26 and the offset provisions from Jan 2010 - he benefitted from neither.
this is a single parent claiming CTC for his 3 children, and working tax credit - he works for minimum pay £5.80 an hour , 25 hrs a week. Re-married, his wife joined him from abroad in March last year. He received an enquiry form from HMRC in Feb this year, and wrote back straightaway telling them that they did not wish to make a joint claim because his wife's current status does not allow her recourse to public funds. He told them she is not working, and that he was only claiming for himself and the children. All very reasonable, but he had made the fatal mistake of not understanding that he had to report to HMRC information about a person he didn't wish to claim for and could not claim for, ( facts which would not have altered his entitlement in any way, even if he had told 'em), and for that heinous omission he received demands a month later, for just over £10,000 HMRC evidently think this is alright. i think they ought to be bothered about depriving people of payments intended to lift children out of poverty.
I came across this quote in a recent article by the great Noam Chomsky and though - HMRC! - "People rightly want answers and they are not getting them, except from voices that tell tales that have some internal coherence, but only if you suspend disbelief and enter into their world of irrationality and deceit."
I'm thinking I should send a copy of my letter to HMRC to the select committee with a covering letter. maybe we should be calling for an independent judicial enquiry? what do others think?
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