Titanic99 Posted December 31, 2012 Share Posted December 31, 2012 http://www.bbc.co.uk/news/uk-politics-20873180 Working people on tax credits cost the taxpayer 6 times more than the unemployed on t'dole. Houses claim about the same amount as workers, but why houses need to be paid for existing in the first place I do not know. It seems it ain't about "benefit cheats" anymore. It's about "tax credit cheats"... Ironically, some workers have been getting more on tax credit than on the dole! Could you try and clarify an aspect of this as I’ve tried finding information out without success. If the rules/regulations allow people to have an increase in wages of up to £25,000, then how can IDS condemn people as “Fraudsters” for staying within the rules. Surely it is only Fraud if you claim something you aren’t entitled to receive. I assume how this works is people submit a claim based on a lower income and have an award based on this, then at a point in the future they increase their earnings without it impacting on their Tax Credit award. If correct, then I can see why this should be changed. ---------- Post added 31-12-2012 at 14:22 ---------- HMRC operates a "process first, check later" system. This means money is paid out with little or no checks done on the claim. If, by a bizarre stroke of luck, a false claim is later checked HMRC, in a lot of cases, will simply remit the debt. On other occasions someone processing a claim will spot an obviously fraudulent claim but they are prevented from doing anything about it because it isn't their job. Even when it can be proven that some claims are false it's hard to stop them due to the law governing tax credits and how they are assessed. It's been a farce from the day it was introduced. I was receiving tax credits when I first started work at HMRC....just how daft is that. HMRC paid so little that they then had to top my wages up with tax credits.....instead of paying a proper wage in the first place. It's a right scam. It subsidises low pay, it's easy to defraud and it encourages people to only work the minimum required hours before they cash in. People earning £4-5k a year can receive over £30k in tax credits depending on their "circumstances". The sooner it is replaced the better. Thanks for the explanation from someone who understands this. Is it Fraud though if someone plays within the rules? Link to comment Share on other sites More sharing options...
ricgem2002 Posted December 31, 2012 Share Posted December 31, 2012 Thanks for the explanation from someone who understands this. Is it Fraud though if someone plays within the rules? not if your an mp Link to comment Share on other sites More sharing options...
Cyclone Posted December 31, 2012 Share Posted December 31, 2012 People on the dole don't pay tax income or NI whilst many of the people claiming tax credits do and in some cases pay more in tax than they get back in credits, so to know how much tax credits costs you would first have to take off the tax these people pay. I’m not sure why he’s brought it up when they are going to be replaced with universal credits anyway. A completely pointless waste of bureaucracy then, to tax income and then give some of the tax back. Why not just adjust tax codes appropriately and not take the tax in the first place! Link to comment Share on other sites More sharing options...
I1L2T3 Posted December 31, 2012 Share Posted December 31, 2012 A completely pointless waste of bureaucracy then, to tax income and then give some of the tax back. Why not just adjust tax codes appropriately and not take the tax in the first place! It is bonkers. The thing is it's not just some of the tax given back, sometimes it is a lot more. It'd be better if a decent wage was paid to begin with, or even more preferably the costs of living were brought down. Link to comment Share on other sites More sharing options...
taxman Posted December 31, 2012 Share Posted December 31, 2012 Thanks for the explanation from someone who understands this. Is it Fraud though if someone plays within the rules? It isn't fraud but it is money they shouldn't be receiving but which the Government can't be bothered to claw back. Tax credits in principle are a good idea. Reward people who are willing to take low paid jobs by giving them a bit extra to make work worthwhile. But it hasn't worked like that. Fraud was so prevalent from day one that the online Tax Credit system was abandoned. People do 40 hours work but, colluding with their employer, claim they only do 16 so they can claim credits. Individuals set companies up, become a Director, claim 16 hours at NMW and get tax credits. It's questionable whether they do any work at all. Then there are the multiple child claims. 12 children, only earning £5600, but claiming £35,000k in tax credits? It's galling to have to look at these examples and not be able to do anything about it. It's a broken system. HMRC should never had been given the job of implementing it, but people wanted to Empire build and took it on to try and prove they could do it. They couldn't. Let the benefits agency pay out and HMRC collect. Link to comment Share on other sites More sharing options...
maxmaximus Posted December 31, 2012 Share Posted December 31, 2012 Interesting. Fail to police the bankers and when they abuse the system it's not their fault. They're just doing what they can get away with. Fail to police tax credits and when people abuse the system come down on them like a ton of bricks. I'm by no means defending the latter but there needs to be some consistency from this government. It wasn't this governmnet that failed to police them. ---------- Post added 31-12-2012 at 18:45 ---------- You can only get Working Tax Credit if you work over 16 hours (possibly more for single people) I stand corrected, but I think the point still stands in that some employers have to employ part time workers and they couldn't pay them a living wage. Link to comment Share on other sites More sharing options...
tinfoilhat Posted December 31, 2012 Share Posted December 31, 2012 It isn't fraud but it is money they shouldn't be receiving but which the Government can't be bothered to claw back. Tax credits in principle are a good idea. Reward people who are willing to take low paid jobs by giving them a bit extra to make work worthwhile. But it hasn't worked like that. Fraud was so prevalent from day one that the online Tax Credit system was abandoned. People do 40 hours work but, colluding with their employer, claim they only do 16 so they can claim credits. Individuals set companies up, become a Director, claim 16 hours at NMW and get tax credits. It's questionable whether they do any work at all. Then there are the multiple child claims. 12 children, only earning £5600, but claiming £35,000k in tax credits? It's galling to have to look at these examples and not be able to do anything about it. It's a broken system. HMRC should never had been given the job of implementing it, but people wanted to Empire build and took it on to try and prove they could do it. They couldn't. Let the benefits agency pay out and HMRC collect. I'd certainly agree with the second paragraph, it just hasn't worked out. I was working in a small shop when it came out - a few people left because with their circumstances it was better that they didn't work and hubby got the tax credits. I also recall at the time someone was wanting a second job but they got hit so hard with tax it wasn't worth it. Something's wrong somewhere. Link to comment Share on other sites More sharing options...
maxmaximus Posted December 31, 2012 Share Posted December 31, 2012 A completely pointless waste of bureaucracy then, to tax income and then give some of the tax back. Why not just adjust tax codes appropriately and not take the tax in the first place! It would make more sense, but then not everyone on the same income isn't entitled to tax credits, so some people that don’t qualify for tax credits would benefit if the government increased tax codes, and we can’t have that can we. Link to comment Share on other sites More sharing options...
SevenRivers Posted December 31, 2012 Share Posted December 31, 2012 Me and my partner both work full time earning about £42k combined. Until April we were getting about £250 per month in Working Tax Credits, then in April it stopped. It left a big hole in our monthly budget, but we adjusted what we spend and do just fine now without it. To be honest it's a relief not to have to go through the annual rigmarole and completing the tax credits review which is always very stressful, every year they'd tell us they overpaid us so we'd have to pay it back, begs the question why they paid it to us in the first place. The whole system of people paying tax, then having to fill in loads of paperwork to "claim some of it back" is a bureaucrats idea of heaven which serves to keep hundreds if not thousands of bureaucratic form checkers, inputters, assessors and investigators on the public payroll. It would be far more efficient to simplify our tax system so peaople pay the right level of tax in the first place instead of taxing people only to pay some it back to them. Link to comment Share on other sites More sharing options...
maxmaximus Posted December 31, 2012 Share Posted December 31, 2012 Me and my partner both work full time earning about £42k combined. Until April we were getting about £250 per month in Working Tax Credits, then in April it stopped. It left a big hole in our monthly budget, but we adjusted what we spend and do just fine now without it. To be honest it's a relief not to have to go through the annual rigmarole and completing the tax credits review which is always very stressful, every year they'd tell us they overpaid us so we'd have to pay it back, begs the question why they paid it to us in the first place. The whole system of people paying tax, then having to fill in loads of paperwork to "claim some of it back" is a bureaucrats idea of heaven which serves to keep hundreds if not thousands of bureaucratic form checkers, inputters, assessors and investigators on the public payroll. It would be far more efficient to simplify our tax system so peaople pay the right level of tax in the first place instead of taxing people only to pay some it back to them. I'm gob smacked that a family on £42k could get £250 per month, there's no wonder the countries broke. Link to comment Share on other sites More sharing options...
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