Justice is an Amnesty

 Since New Tax Credits were introduced in 2003, there have been over 7 million overpaid claims totalling some £6.152 billion. A significant number of these overpayments are not the fault of the claimant, but are caused by errors at HMRC. Fully compliant, non-fraudulent claimants suddenly find out that they have an overpayment ranging from a few hundred to many thousands of pounds when the repayment demands drop through the letterbox.

These overpayments arise because of problems with the Tax Credit computer system, processing and data input errors, wrong advice from helpline operatives, and losses within the UK postal system.

For example, a claimant may ring the Tax Credit helpline and report a Change of Circumstances (CoC) which should cause their claim to be reduced. For some reason, those CoC's are not recorded or processed correctly and the claim continues to be paid at the now incorrect, higher rate. It is sometimes years later when the claimant receives notification of the resulting overpayment, along with demands for repayment.

Another particularly devestating example is when a claimants Annual Return is lost in the postal system. The past years Tax Credit award is then 'annulled' by HMRC, and the whole years award becomes an overpayment. This becomes even more shocking when a reported 15 million items are lost within the UK postal system each year. HMRC are also almost infamous for sending mail to old addresses, often years after being informed of a change of address.

Far too often, worried claimants repeatedly ring the Tax Credit helpline to inform HMRC that they think their award is too high, or that the lump sum credited to their bank account shouldn't be there, only to be repeatedly told that everything is correct. Months or years later, the demands for repayment drop through letterboxes.

There have been improvements in the system. It used to be the case that around 30% of all claims were overpaid. That figure has now dropped to around 20%, but still represents around 1.3 million claims each year. There have also been significant improvements in the rules and guidelines for recovering overpayments, but these still do not go far enough and are not always followed correctly. Additionally, overpayments are recovered using the rules that were in force when the overpayment occurred, which are extremely unfair, harshly applied and blatantly favour HMRC. Even when it is proven that HMRC are at fault, the overpayments can be recovered because of these unfair rules.

Tax Credit claimants who have never had an overpayment may be interested to know that it could happen to them too - it's just a matter of time, combined with a simple twist of fate. We never thought it would happen to us, either. It's like a state lottery where you take your chance, and you currently have a 20% chance of losing!

Every major project should be assessed periodically and corrective action sought, implemented and applied as necessary. The Tax Credit system is no different, even if it is a tough one to call.

Liberal Democrat and Conservative MPs publicly acknowledge the failings of the system and do what they can.

Labour aren't listening, and because of that they are losing hundreds of thousands of voters, if not millions.

Tax Credit Casualties welcome the courageous initiative of 'LabourSpace' and the opportunity to bring our 'Justice is an Amnesty' campaign into the Labour parlour. Tax Credits are Labours flagship, but they are failing at least one fifth of the people that they were designed to help. Tax Credit overpayments cause health problems, dispair, relationship breakdown, debt and poverty. Even suicide. The most vunerable, the poorest in our society, feel the effects the most.

We ask everyone to join with our campaign for an amnesty of all non-claimant fault, non-fraudulent Tax Credit overpayments. We have verifiable proof of everything mentioned on this page.

Help us to make a Labour Party that has lost it's roots, listen and take action.

It's not too late.

Tax Credit Casualties
    www.TaxCC.org