early day motion -

'That this House notes that half a million or more families were overpaid child tax credit in 2003-04, often as a result of Inland Revenue error; is concerned by the hardship and difficulties experienced by families when these overpayments are recovered automatically from future tax credit entitlements; and calls on the Inland Revenue to introduce an amnesty in respect of overpayments of child tax credit in 2003-04 unless the overpayment was caused by fraud on the part of the claimant.'

The government of the day insists on perpetuating a system that is causing real financial difficulty to poorer people, and seems immune to all requests to amend it. The opposition party tables an early day motion, seeking for an amnesty because of the hardship caused.

Anyone seen the film "Trading Places"?

Meant to say opposition supports early day motion, I think.

Wonder how they arrived at the 500,000?

I feel |I must have dealt with at least 10% of these myself!!!!!!!!!!

Have you seen the news item on rightsnet 25 Oct 2004. IR to write off small overpayments due to official error.The Revenue reports that, whilst the underpayments have been corrected -

'Having regard to longstanding practice on 'official error', and the heavy preponderance of small overpayments in these cases, the decision was taken to write-off all incorrect overpayments where the total involved was less than £300 ... The amount written-off is £37 million.

The £300 limit was selected so as to minimise the total cost to public funds. Costs taken into account for this purpose included both the cost of writing off overpayment below the limit and the likely cost of the attempted recovery of overpaid tax credits in cases where the total overpayment was equal to or greater than the limit.'

With regard to the remaining 82,000 cases where the total overpayment was £300 or more, the Revenue reports that -
'... those cases are subject to normal recovery action. Some of these overpayments may not be recovered, for example where official error is accepted.'

So the caveat of whether it was reasonable to have known there was an overpayment now magically disappears. Shouldn't moan i suppose as ir will reduce the amount of times i will have to contact the IR helpline only to listen to some form of nonsense or another!

Hi Ian,

My understanding was that the sub £300 overpayment write off only applied to overpayments that occured as a result of an IR software error, that arose last year (and as reported in the IR Audit and Comptrollers report). If it is now broader, thats great. What do you think?

In any case, it would seem to be very unfair to enforce an overpayment if it is £301, but not if it is £299. Surely it would be better to disregard the first £300 of all OPs affected, but I suppose the cost would be too high for the treasury to bear.

Steve

It would also be unfair to recover a larger overpayment from a poorer claimant while not recovering a small overpayment froma better off claimant where the other circumstances are similar.