"The tax credit system is complicated, and HMRC will have to overcome significant challenges if it is going to achieve value for money.
HMRC deserves credit for demonstrating innovation, but it has further to go to achieve sustainable reductions in tax credits error and fraud. To tackle error and fraud effectively, there needs to be an improved understanding of risks and better use of information." Amyas Morse, head of the National Audit Office, 14 February 2013.
HMRC has significantly overestimated the impact of its interventions on the level of error and fraud:
"In 2009, HMRC announced a target to reduce error and fraud to 5 per cent by 2010-11, down from 9 per cent. HMRC missed this target. Error and fraud losses for 2010-11 were just over 8 per cent, amounting to almost £2.3 billion, around £850 million higher than if HMRC had achieved the target.In other words:
Today's report concludes that, while HMRC has made improvements to its approach and increased the amount of error and fraud it prevents, HMRC is not yet achieving value for money.
HMRC believed it was on track to meets its target, but had overestimated the impact of its activities to tackle error and fraud. It estimated that it had prevented £1.4 billion of error and fraud in 2010-11, but has revised this to under £500 million.
HMRC has not yet developed an effective response to stop error and fraud recurring after it has corrected a claim."
Get a Grip!
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.
Ken Frost has negotiated a 10% discount on any polices that may suit your needs.
However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.
What is Solar Tax Investigation Insurance?
Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.
To find out more, please use this link Solar Tax Investigation Insurance
Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.
Click the link to read about: Tax Investigation for Dummies
HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"