Inland Revenue Hails New Tax Credit As Success

by Jason Gorringe, Tax-News.com, London

12 September 2003

In an attempt to gloss over the computer glitches and delays that have dogged the UK government's new tax credit system, the Inland Revenue released figures this week claiming that 95% of an anticipated 6 million people are benefiting from the new credit, launched in April this year.

According to Dawn Primarolo, Paymaster General with responsibility for overseeing the Inland Revenue department, some 18 million Britons, including 9.8 million children, are benefiting from the tax credit or enhanced payments of other forms of benefit. She also claimed that the number of families who now have help with the costs of childcare is 50% higher than under the old tax credit regime.

However, this is cold comfort for the tens of thousands who were on the wrong end of an administrative blunder earlier this year- Inland Revenue figures published in July hardly shower the scheme in glory. At that point, some 500,000 people had their child tax credit or working family tax credit delayed, mainly as a result of hold-ups caused by the scheme's computer system. Worse still, as many as 186,000 hadn't recieved any kind of payment many weeks after the new credit was launched.

Some experts are now suggesting that the Revenue could be swamped with yet more claims on top of the millions they had to process this year. This is due in large part to accountants advising more well off families to put in a 'protective claim' in order to hedge against a sudden change of circumstances.

"It will be interesting to see what the Revenue says when it has 8m claims to process instead of 6m," Ann Redston, tax partner at Ernst & Young told the Telegraph. "Furthermore, there is a great deal of anecdotal evidence suggesting that some of those who really are in need are still not claiming because the system is too complicated," she added.

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