Inland Revenue : tax credits and deleted tax cases, fifth report of session 2005-06, report, together with formal minutes, oral and written evidence

A new system of Child Tax Credits and Working Tax Credits was introduced in April 2003 with the aim of helping tackle child poverty and encouraging more people into work, and the new scheme was intended to be simpler for claimants to understand and for the government to administer.

However, a large number of complaints have arisen over the management of Tax Credits, and the Committee's report finds that its operation has proved unsatisfactory for a significant minority of claimants who have been disadvantaged by the recovery of overpayments.

The report focuses on the complexity in the design and administration of the tax credits system, the problems of hardship to claimants caused by recovery of overpayments, the levels of claimant error and fraud, problems of deleted tax cases and the governance of IT projects.