09 December 2012

Straws, camels and all that

I think that I am beginning to understand how Her Majesty's Revenue and Customs is failing to catch the tax dodgers.  The Independent explains:

More than half a million families will be made to prove to tax inspectors how much they are spending on childcare or whether their children are in full-time education under new rules buried in the small print of George Osborne's Autumn Statement.
Some 80,000 households which claim child tax credits for pre-school children will have to send evidence to HM Revenue and Customs (HMRC) of the amount they are paying a nursery, child-minder or nanny over a 10-week period. A further 500,000 families with youngsters aged between 16 and 19 who are in full-time education and are therefore eligible for child tax credits will have to send proof, in the form of letters from schools or colleges, to HMRC, rather than "self-certify" as they do now.
The Chancellor estimates the new rules will recoup £315m in overpayments in tax credits in the year 2014-15, a further £185m in 2015-16 and £85m the following year. Fraud and error in the tax credits system last year cost the Treasury more than £2.2bn, and Treasury sources said there needed to be tougher measures to claw back taxpayers' money.
Yet there were warnings last night that the new rules would deter some parents – who are at the lower end of the income scale – from claiming tax credits because of the onerous and complex paperwork.
The new rules follow measures imposed on higher earners to provide paperwork to tax inspectors on child benefit. From next month, parents who earn more than £50,000 will lose most of their child benefit and must send payslips or bank statements to HMRC in order to claim back some of the money. Child benefit is being axed altogether from households where one earner is on a salary of more than £60,000.

And all this at a time when Slasher Osborne is hacking away at staff numbers in HMRC.  Little wonder that the department is dysfunctional, with more and more tasks loaded on the backs of fewer and fewer staff.

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