Wednesday 20 May 2009

Tax Credits: A load of shit (part 94)

From Channel 4:

A total of 1.3 million families were underpaid the benefit during the year, up from 800,000 the previous year, with people missing out on an average of £610 each, the HM Revenue & Customs data showed. At the same time £1 billion was overpaid to 1.3 million families, with these people receiving around £705 too much...

It's difficult to say which is worse, but moving on:

A Revenue spokesman said: "Overpayments are not wrong payments. Responsive systems mean that awards can be changed in-year, adjusting to customers changing circumstances. Awards are finalised at the end of the tax year to make sure families have received the tax credits they were entitled to...

Doing a Tax Credits form is about as much fun as doing an income tax return, and they expect 'families' to re-submit claims every time their working hours change; a child ends nursery and goes to school etc. Does that sound very "responsive"? And they ended a sentence with a preposition.

"The level of overpayments is now £1 billion, less than half the level in 2003/04 and 5% of finalised entitlement paid out by HMRC."

Well, whoopie-f***ing-doo!

Overall, 5.98 million families received tax credits during 2007/08, with the average payment increasing by £200 compared with the previous year to £3,611.

I love the spurious accuracy of those figures.

The number of people on low incomes without children who received money through tax credits rose by 10% to 336,000 during the year.

That's the easiest bit to sort out actually: you find the break-even level, where PAYE deducted = Tax Credits paid (slightly above £10,000) and declare that to be the tax-free personal allowance, job done.

6 comments:

Stan said...

I've never seen the point of tax credits. What's the point of taxing someone and then paying them a bit back? Double the level of bureaucracy and twice as likely to get screwed up.

We each get a tax allowance - better to add anything on to that and not take the bloody money in the first place.

Bill Quango MP said...

Stop sorting out the tax system. With this and VAT and the crap car scheme you will be putting 10s of thousands of administrative staff and line managers and deputy dept head and payroll etc out of work.

End your madness. You will destroy the only growth sector of the economy!

RantinRab said...

Don't get me bloody started on tax credits! I think you know my opinion of them.

JuliaM said...

"I've never seen the point of tax credits. What's the point of taxing someone and then paying them a bit back? Double the level of bureaucracy..."

Well, exactly! That's the point of tax credits...

Anonymous said...

You guys don't get it. Tax credits are only a refund on your tax if you work and pay tax in the first place.

I had to fill out a form for someone at work the other day. He was married with no job and five kids.

The form was for him to waive an official fee as a benefit recipient. I earn about dead on the national median and the bugger earned more than I did when you take into account all his earnings are untaxed.

His total income was about £1,550 a month and chances are he had social housing for a token rent on top of that.

The tax credit system and the child poverty agenda are about redistributing money from one group of people to another.

It's got nothing to do with bureucracy, it's Brown's legacy and he is setting a trap for the Tories by making it statutory with the Child Poverty Bill.

Mark Wadsworth said...

Anon, I do get it. But a lot of others don't.