More than £1 billion of fraudulent and incorrect tax credit payments were stopped in 2010/11, Chancellor of the Exchequer George Osborne said.
The Chancellor told the House of Commons that HM Revenue & Customs (HMRC), as part of its new error and fraud strategy, had set itself the target of saving £1bn by March 2011 that would otherwise have been paid out as tax credits, either in error to customers or to criminals defrauding the system.
Mr Osborne said: “The department has exceeded its £1bn target, and prevented a total of £1.05bn being incorrectly paid out – an increase of 60 per cent in just one year.
“The Government is committed to cutting the amount of money lost to fraud and error in the benefits system. HMRC’s achievement means that tax credits are being paid to those entitled, whilst waste is swiftly cut out.”
He added that this year, high-risk tax credit claimants face more checks than before when they renew.
As part of what the Coalition calls a clampdown on claimants who represent the greatest risk, HMRC is examining claims for error or fraud. The risks will cover claimants’ statements on employment, self-employment, hours worked, childcare and children as well as any details that have changed since previous years’ claims.
Notes
HMRC and Department for Work and Pensions published a strategy to tackle error and fraud in October 2010, outlining the departments’ joint approach towards reducing error and fraud in the benefits system. The strategy is available here: http://www.dwp.gov.uk/docs/tackling-fraud-and-error.pdf
