SERENA FURNISS, a mother of six from the Isle of Wight, greeted Tony Blair’s public apology this week over the tax credit fiasco with cynicism.
While the Prime Minister pledged to tackle the misery caused by errors in tax credit payments made by Revenue & Customs, Mrs Furniss and her husband, Nikolas, were left contemplating the cost of remortgaging their home. They were forced to do so after the Revenue insisted on clawing back £6,500 it had overpaid them. They are one of the 1.8 million families who were overpaid tax credits in 2003-04.
Times Money has been calling for the Government to tackle the tax credits debacle since we first highlighted the hardship it caused the Furnisses last August.
The tax credits are meanstested allowances designed to boost family income and to help members of lower-paid households into work. But this month the Revenue admitted that nearly a third of the 5.4 million tax credits made in 2003-04 were overpaid. The Revenue intends to claw back the £1.9 billion, causing immense suffering to the very families that the tax credit was designed to help.
Elizabeth Barlow, a nurse from Humberside, is among the victims of the fiasco. She was initially overpaid £2,800 in tax credits after the Revenue entered the wrong figure for childcare costs for her two-year-old daughter, Mia. The Revenue said that she should have spotted the error and reduced her monthly tax credit payment from £550 to £192. This week it added to her misery by cutting the monthly payment to £177.
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Ann Abraham, the Parliamentary Ombudsman, has urged the Revenue to write off all overpayments made in the first two years. But the Government has no plans to waive the full amount. Despite Mr Blair’s apology, the Revenue is clawing back the overpayments automatically, leaving Ms Barlow and others to bear the brunt of its failings.
MARK ATHERTON