News: Families spared as Revenue calls off tax clawback

U-turn in credit overpayment row; casual workers losing out; Truro is No 1 property hotspot; garages slated for poor service

Struggling families embroiled in a dispute with the taxman over tax-credit overpayments were thrown a lifeline last week when the Government suspended his attempts to recover the money.

The decision follows two reports from the Parliamentary Ombudsman, Ann Abraham, and the Citizens Advice Bureau (CAB) criticising the automated benefits system. As a result of these criticisms, the Prime Minister was forced to apologise for the "distress and hardship" caused to families.

In an emergency statement to the House of Commons, Dawn Primarolo, the Paymaster General, then announced she had asked Revenue and Customs (the merged body replacing the Inland Revenue) to suspend its recovery of overpayments wherever there was a dispute with a claimant.

According to the CAB, a third of claimants whose tax credits had been overpaid fell into poverty when asked to repay. Many families were trying to survive on as little as £56 a week and, in extreme cases, the Salvation Army was helping with food parcels.

The Parliamentary Ombudsman's report focused on poor administration. The tax-credit system, one of the Government's flagship policies, was introduced in 2003 to streamline the payment of benefits; some six million families are recipients.

But the complex nature of the scheme, coupled with the Revenue's own computer errors, has led to misery for hundreds of thousands of families. Part of the problem is that the "reclaim" mechanism for overpayment is built into the system and does not operate independently.

Tax-credit awards are calculated on family income figures dating back two years. Any significant increases will automatically reduce entitlement to benefits and so prompt the Revenue to claw back the money. But many recipients either weren't prepared for the repayment or found themselves short-changed by the administrative process; low-income families saw vital benefits disappear.

Worse, computer errors at the Revenue resulted in inaccurate calculations of individual claims. Around £600m was overpaid, and the Revenue then demanded this money back, adding to families' problems.

Of the £13.5bn paid out in tax credits in 2004, the first full year of operation, some £1.9bn - 14 per cent - was overpaid.

Ms Abraham has recommended that all overpayment resulting from government error be written off. The Treasury said it was reviewing its credit reclaim procedures.

TUC fights for temps

The employment rights of the UK's temporary workers are among the worst in Europe, a report from the TUC has found.

Most of the UK's 600,000 temps receive no pension, paid holidays, training or sickness pay and have no protection from unfair dismissal. On top of that, they are usually paid less than colleagues doing the same job.

Of the 20 EU countries with information available for comparison, only the UK, Hungary and Ireland did not give temps the right to be paid the same as a permanent employee doing a similar job.

And the UK does not require employment agencies that find work for temporary staff to have a licence to operate.

The problem is partly down to delays in introducing an EU directive that would give temps greater protection at work, including equal pay, maternity rights and safeguards against discrimination. The directive has been stalled by a disagreement over when a temp should get these rights. Some countries want them to kick in after one year's employment; others say six months is fairer; others believe they should start from day one.

The TUC wants the Government to use its EU presidency to implement the reform. However, the CBI, which represents businesses, said that this would force companies employing temps to make cutbacks because of the burden of extra regulation.

Inflation location

Truro, a cathedral city in Cornwall, has played host to the greatest house price growth over the past 10 years, new research has shown.

Between 1995 and 2005, prices increased by 272 per cent, according to a report by County Homesearch, a company that seeks properties for buyers.

Using data from the Land Registry, it found that towns and cities with the biggest rises included Exeter (224 per cent), Bath (221 per cent) and Northampton (217 per cent). The slowest growth was seen in Middlesbrough (116 per cent) and Hull (123 per cent).

Repairs on the ropes

Less than one in four cars are properly serviced in UK garages, say trading standards officers.

In a "mystery shopper" test, 88 cars were sent in for service with faults such as loosened wheel nuts, blown circuit fuses, defective brake lights and soft tyre pressures. When the cars were picked up, only 21 had been correctly serviced. Over a third were left with serious faults.

If the quality of workmanship does not improve, Trading Standards intends to call on the Government to tighten its regulation of car-repair services. This could lead to compulsory licensing of garages.

Several garages in the survey now face either prosecution or written warnings. The Retail Motor Industry Federation, some of whose members were involved, said it would be working with trading standards officers to investigate the claims.

The motor repair industry is under increasing pressure to clean up its act. In April, the National Consumer Council threatened to lodge a "supercomplaint" to the regulator about poor service.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Suggested Topics
Have you tried new the Independent Digital Edition apps?
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Editor-in-chief - Financial Services - City, London

    £60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Guru Careers: Management Accountant

    £27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

    Guru Careers: Project Manager / Business Analyst

    £40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

    Day In a Page

    General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

    'We will not sit down with Nicola Sturgeon'

    In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
    VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

    How ordinary Britons celebrated VE Day

    Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
    They came in with William Caxton's printing press, but typefaces still matter in the digital age

    Typefaces still matter in the digital age

    A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
    Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

    'Missing link' between Earth's two life-forms found

    New microbial species tells us something about our dark past, say scientists
    The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

    Pan Am Experience: A 'flight' back to the 70s

    Tim Walker checks in and checks out a four-hour journey with a difference
    Humans aren't alone in indulging in politics - it's everywhere in the animal world

    Humans aren't alone in indulging in politics

    Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
    Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

    Crisp sales are in decline

    As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
    Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

    Ronald McDonald the muse

    A new wave of artists is taking inspiration from the fast food chain
    13 best picnic blankets

    13 best picnic blankets

    Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
    General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

    Miliband's unlikely journey from hapless geek to heart-throb

    He was meant to be Labour's biggest handicap - but has become almost an asset
    General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

    On the margins

    From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
    Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

    'This is the battle of young Egypt for the future of our country'

    Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
    Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

    Why patients must rely less on doctors

    Improving our own health is the 'blockbuster drug of the century'
    Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

    Flesh in Venice

    Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
    11 best anti-ageing day creams

    11 best anti-ageing day creams

    Slow down the ageing process with one of these high-performance, hardworking anti-agers