It has been announced this week that HMRC are planning on targeting self-employed individuals who may be making fraudulent tax credit claims. They have sent out 12,000 letters to these suspected individuals which outline their plans on tackling this issue. These people will be asked to provide extra evidence to back up their claims.
David Gauke, exchequer secretary to the Treasury, said: “HMRC is determined to take a tough approach to targeting possible fraud among tax credit claimants.” He added that the initiative is part of a wider government crackdown designed to tackle fraud of an ‘unaffordable and unacceptable’ nature among tax and benefit claims.
This crackdown has been fuelled by the tax year of 2009 when 8.9% of tax credit awards had errors relating to income which resulted in a £145 million loss to the Treasury. HMRC are planning to investigate every claim and will use credit reference agencies and data matching to spot fraud patterns. Deliberate tax credit fraud can be punished by criminal prosecution and imprisonment, while a simple failure to notify HMRC of changes in income can result in overpayment to claimants, which would have to repaid.
