Thousands of Milton Keynes Families Having to Repay Tax Credits

12.00.00am BST (GMT +0100) Mon 13th Jun 2005

Jane Carr, Liberal Democrat Parliamentary Spokesperson for the North East Milton Keynes constituency, today slammed the Government over the administration of the tax credit system, following astonishing figures published on the number of overpayments. In total, a third of all awards for 2003/04 were overpayments, leaving nearly 2 million families repaying on average more than £1000 each.

In Milton Keynes alone 7,300 families were overpaid a total of an amazing £7.9million pounds (average £1082 per family) which they are having to repay. Meanwhile, 2,800 families have been underpaid a total of £2.2 million (average £786 per family).

Jane Carr said: "These figures are unprecedented and reflect not only serious problems with the computer system, but also inherent flaws within the new tax credit system.

"Many constituents have approached me with concerns about this issue. There are many local cases where the tax credit office has attempted to claw back money that had been overpaid as a result of administrative errors rather than customer misinformation.

"Too many families are having their finances thrown into chaos by the Inland Revenue. There are serious problems and hardship, especially for those on low incomes.

"Treasury Ministers have now announced there will be changes to the way overpayments are clawed back. This amounts to an admission by the Government that the Inland Revenue has not been acting responsibly. But new guidance alone will not solve this problem. A return to a system of fixed awards would end this bureaucratic nightmare for many families."