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Tax Credit Over Payments Fall By £700 Million

While the above headline makes good reading on the surface, things are maybe not so rosy when you consider that even after the £700 million reduction in over payments from 2005-6, the figure for 2006-7 was still over £1 billion!

The figures from HM Revenue and Customs (HMRC) show that while 6 million families are now receiving the vital tax credits the system providers, a staggering 1.3 million have been over paid. In many cases the people involved have given the authorities the correct information at the correct time, only to find up to 2 years later that there has been a mistake. These are families that are very often on the bread line and the majority of them are not in a position to repay the over payments.

While the authorities consider the improvements which have been made, more and more families are receiving threatening letters and calls from debt collectors that the government has hired to retrieve the over payments. There also seems to be something of a postcode lottery with many people seeing their debts written off if they push hard enough, while others are seeing their overpayments deducted from current payments, leaving many with no additional Tax Credit income for the current year.

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