HMRC Are Not Psychic

Quite rightly HMRC are more than fed up with having to chase up tax credit claimants who do not update them with changes in their circumstances.

The government claims that approximately £400M a year is being overpaid in tax credits, because parents don't tell HMRC about changes in their childcare costs. Approximately 345,000 tax credits paid in 2008/09 (4.5% of the total) contained errors relating to childcare.

Aside from the loss of tax revenue, there are additional costs incurred by HMRC in chasing up and correcting these errors.

Tax credits is just one example of the many of Gordon Brown's ever so complex and unwieldy "tweaks" that he was addicted to making to the tax system.

It is high time that the tax system be radically overhauled and simplified. A good staring point would be to abolish tax credits and raise personal allowances to a decent level, eg £15K.

Tax does have to be taxing.

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