Wednesday, May 31, 2006

Scandal of the bad administration of tax credits



The scandal of the working family tax credits is a real disgrace. I am not sure whether ministers resigning is ever going to be the answer because the real fla is the total failure of the system. The problem is that we have a system that works out how much you are due based on your salary but should your salary rise during the course of the year (as most people's do) then the amount you can claim goes down. However, because you only get a single anual reminder from the Tax Credit department it means that you could end up owing back months of over payments, unless you write to them to tell them. Of course, as with most bureaucracies you have to rely on them doing what you ask and frequently they do not. What then happens is that they demand money back when they should have made the adjustment in the first place. I am fairly sure they wrote off millions during an amnesty on this issue.

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