UK tax credit leaflet withdrawn from circulation
As the UK authorities look to simplify the tax credits system they have been forced to withdraw a new leaflet explaining how overpayments occur, despite only being released last week. It would appear that the information contained in the leaflet is incorrect and does not given the overall picture with regards to overpayments.
Many people will be surprised to learn that even if you fail to advise the HMRC about changes to your income and lifestyle, you can actually increase your income by up to £25,000 a year before you will be liable to repay any "overpayments". This £25,000 leeway before any overpayments need to be repaid is 10 times the original figure of £2,500. The original figure was to blame for the significant underperformance of a system which has caused severe hardship and in some cases pushed people to the verge of suicide.
Even after recent reforms of the service, the government has confirmed that overpayments are still running at around £1 billion a year and between 2003 at 2007 a massive £7.3 billion was paid in error. This has been something of a disaster and while many people have benefited, a significant number of the UK population have literally given up hope of receiving tax credits because of problems in the past.
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