'Working tax credits lost due to HM Revenue failure'

Monday, December 7th 2009

The Low Incomes Tax Reform Group (LITRG) says thousands of tax credit claimants could be missing out on money because HM Revenue and Customs (HMRC) is not including them in its automatic backdating regime.

The group says those who have no children and who were employed before HMRC received their claim are excluded from the backdating regime, which others get automatically.

Instead they must request to be backdated and are paid working tax credit from the date the office receives their claim form, which could see three months worth of tax credits - around £500 - lost.

John Andrews, chairman of the group, says "HMRC are making no effort to inform them they can do this". Tax credit leaflets, Directgov websites and claim forms all fail to tell people how to request backdating, he said.

The group is calling for HMRC to write to each customer who has not received backdating to establish whether they are due any money. It also wants the claim form itself to highlight customers' entitlement.

According to HMRC statistics, 6.1 million families claimed child and working tax credits in April 2009. Half a million were childless and received working tax credits alone.