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Tax Credit System Still Creaking With £1.5 Billion Loses

While the headlines will all be about the percentage of tax credits being lost to fraud, the figure of £1.5 billion includes over payment, fraudulent claims and errors within the tax credits operation. This is a problem which has now been ongoing for many years and no matter how much money the government throws at the problem, there always seems a need for more. So where did it all go wrong?

The problem with the UK tax credits systems appears to be the calculation of data, mis-handling of data and general errors and bad management. Hundreds of thousands of people have either been over paid or under paid, despite giving the authorities the correct information from day one. Many who received over payments have been hit with massive reclaims and demands for the money to be paid as soon as possible.

This has caused many families to see their tax credits cut off to pay for over payments which were not their fault, leaving literally hundreds of thousands of people on the breadline, forced there by the system which is supposed to protect them!

In principle the tax credits system was an excellent idea, in practice it has been the most expensive and badly managed project of recent times.

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