HM Revenue & Customs 2006–07 Accounts

Time for the taxman's report card. The HMRC Standard Report and Accounts for 2005-06 has just been published (pdf).

Very interesting reading. So far, I have gone through the Tax Credits section, and here is an extract from the concluding section (emphasis mine):

(2.52) During 2006-07 the Department paid a net £18.7 billion in tax credits and an average of 5.5 million families received provisional 2006-07 awards.

The Department estimates that year end adjustments to awards meant it overpaid £1.7 billion and underpaid £549 million in 2005-06.

In the first three years since the scheme was introduced, the Department calculates that these adjustments, and other small changes to entitlement after the finalisation of awards, have led to a debt of £6.0 billion.

It has also identified £600 million from in year adjustments to 2006-07 awards and will identify further overpayments for this year once awards are finalised.

By the end of March 2007 the Department had collected £2.0 billion of this debt and written off £0.7 billion. £3.9 billion of overpayments remain to be collected by the Department. It has provided for £1.6 billion in respect of doubtful debts.

When Gordon Brown was asked during Prime Minister's Questions earlier this week about the overpayment of tax credits, he launched into self-congratulatory mode on how the tax credits system has alleviated hardship for many. I don't doubt that. I only wonder whether the high price (in terms of overpayments, etc) is worth paying for whatever benefits the system brings.