Tax credits are a shambles

3.37.29pm BST (GMT +0100) Wed 22nd Jun 2005

Bath's MP, Don Foster, has today slammed the Government's Tax Credit system as being an "utter shambles", with the Adjudicator's Office Annual Report 2005 highlighting the severe problems.

Commenting, Don said,

"There are 6,700 people in Bath claiming Tax Credits, with 2,300 of these being overpaid last year, and 800 people were underpaid. But there have been enormous difficulties in sorting out the problems resulting from this, frankly daft, system of working out what people are entitled to.

"Today's report confirms what a shambles the administration of tax credits is in with a staggering 86% of complaints being upheld by the independent Adjudicator.

"I know only too well the chaos - and real hardship - this ridiculous system can cause in people's lives. These people are often living on the bread line, and to learn that they have to repay, often significant amounts of money in the event of an overpayment, pushes them into poverty.

"Many people have come to me for help in resolving their cases, and from my own experience in dealing with these issues, I know how confusing, inflexible and frustrating the system can be, and just how long it can take to resolve the problems.

"The computer system that is used by the Tax Credit Office seems to be totally inappropriate, and the staff, while obviously trying their best in incredibly difficult circumstances, are simply overwhelmed by the scale of the problems.

"I believe there is an overwhelming case for returning to a system of fixed awards to end the bureaucratic nightmare being faced by so many families."