HMRC must tackle the devastating hardship of  tax credit errors with clear, upfront advice

Responding to a report from a Public Accounts Committee (PAC) investigation of HMRC's performance in cutting the level of fraud and error in the tax credit system, Gillian Guy, Chief Executive of national charity Citizens Advice said:

"The cost to people of HMRC's tax credit errors and inaccurate advice is too high - debt, distress and devastating hardship. Using client feedback, for years Citizens Advice has been suggesting ways for HMRC to avoid wasting taxpayers money. The PAC’s recommendation that HMRC commit to getting decisions right first time, providing accurate advice at the beginning of a claim, improving the resourcing of the tax credit helpline and the PAC recommending they utilise feedback from Citizens Advice Bureaux will be steps in the right direction.

"Bureaux advisers from all over the country report appalling cases of poor HMRC communication - both when  tax credit claimants first report a change in their circumstances and when questions arise about their claim. Lone parents being forced to survive for months on end on just income support and child benefit, losing childcare support so risking being pushed out of work, borrowing money and getting into debt in order to be able to feed their children. One client in the north west was pursued by a  tax credit compliance officer who said she was in a couple and another compliance officer who said she was a single person.

"The slowness of the tax credit appeals process, where payments are suddenly stopped, represents systematic injustice. People were being told not to contact the  tax credit office again for six to eight months because they had a backlog of cases. It's clear from the number of decisions bureaux have helped clients subsequently overturn that HMRC's actions were grossly unfair and it is right that this is now being addressed.

"Citizens Advice looks forward to helping HMRC with its review of the guidance and support it provides for its staff and  tax  credit claimants. The current system struggles to keep up with changes in people's circumstances and government cuts to the welfare budget are having an impact on people struggling to live their daily lives. It is vital for the successful implementation of Universal Credit simplifying the benefits system, that clear and accurate advice is available upfront and the Government acts quickly on the information it receives."

Lone parent of two under-7s spent Christmas without food or gas because her tax credit payment was wrongly stopped

A lone parent with a three year old and a seven year old spent Christmas and new year without food or gas, suffering stress and getting into debt because her tax credit payment was wrongly stopped without any notification – she only found out when she tried to buy some groceries. She called the tax credit phone number but couldn’t get through, sent three letters to no avail. With support from Citizens Advice who approached the tax credit compliance team they eventually fixed their phone number and contacted the client to apologise for her not being able to get through. Unfortunately a large number of other clients are just left in limbo with their tax credits stopped and their complaints unresolved for long periods of time.

Notes to editors:

1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
3. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
5. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.