TAX CREDIT FIASCO

Parliamentary ombudsman Ann Abraham has hit out at overpayments of tax credits in a special report, Tax Credits: Getting it Wrong?, published this week. While many problems in the system have been ironed out, work still needs to be done, she says, and 363,000 families on low incomes are being pushed into debt by “harsh” requests for recovery from HM Revenue & Customs. A third of tax credit payments were overpaid in 2005–06, with nearly half a million being overpaid by more than £1,000. Abraham says: “The impact on those concerned, typically those on the very lowest incomes who are the most vulnerable in society, is huge and highly distressing.”