Tagged: PAYE

HMRC Mix-up leaves former miners owing hundreds to tax man

A miners’ leader has called for an investigation after miners were left owing hundreds of pounds in unpaid tax.

Alan Cummings, chairman of Durham Miners’ Association, said he had received more than a dozen calls in two days from worried ex-miners who had received PAYE calculations stating they owed between £300 and £900.

The problem appeared to affect former miners who were in receipt of contribution-based employment support allowance and were also receiving a mineworkers’ pension.

Mr Cummings said in previous years tax was taken from the employment support allowance through the PAYE system without problems.

However, he believed there had been an error which meant the system had not taken tax from ex-miners for the 2013/14 tax year.

For some reason something has gone badly wrong and the tax hasn’t been taken off,” he said.

We now have people who have received tax demands for several hundred pounds and they want to know why the system has failed.”

He added: “This has caused a lock of shock and concern among people who aren’t on much money.”

Mr Cummings said he was talking to HMRC to find out why the problem had occurred.

 He appealed for any ex-miners affected to get in touch, whether they were from the North-East or not, to establish the scale of the problem.

The former miner has contacted Easington MP Grahame Morris asking him for help.

This is affecting people who are often on particularly low incomes and maybe aren’t in the best of health – it beggars belief that this has occurred,” Mr Cummings added.

HMRC stressed that it sent out tax calculations rather than tax demands.

Any money owed could be paid interest free from April 2015 until March 2016, using the PAYE system in 12 chunks.

If people needed further time to pay, it could be done over two or three years.

A HMRC spokesman added: “We are unable to comment on individual taxpayers. Anyone who receives a calculation which they believe is incorrect should contact us and we will do all we can to help.”

Source –  Durham Times, 16 Oct 2014

Universal Credit Could Lead To ‘Increased Risks Of Fraud And Error’, Say Work And Pensions Committee

It remains uncertain how DWP will manage the housing costs element of Universal Credit without increased risks of fraud and error, warns a Work and Pensions Committee report.

The Government has stated that an IT system (the Integrated Risk and Intelligence Service (IRIS)) will allow it to cross-check data and provide similar safeguards against fraudulent claims under Universal Credit as are currently operated by local authorities within the Housing Benefit system.

 However, last year the National Audit Office (NAO) found that IRIS was “missing” from the UC Pathfinders, and it remains unclear how or when DWP will achieve automated access to the range of property data currently available to local authorities. The Committee concludes that such a system will need to be fully developed and tested before national implementation of Universal Credit commences.

Commenting on the report, the Chair of the Work and Pensions Committee, Dame Anne Begg MP, said:

Through the use of RTI—real-time information on PAYE earnings—Universal Credit has the potential over the longer term to substantially reduce fraud and error in the benefits system. However, this could be seriously undermined because of the uncertainty about how DWP will administer the housing element of Universal Credit without increased risks of fraud and error.

Under the current housing benefit system, local authorities can cross-check claims across a range of data relating to other council services. Unless DWP is able to cross-check Universal Credit claims in a similar way it may be less effective in tackling fraud and error.

It is vital that a fully developed and tested IT system, which allows DWP to cross-check data, is in place before Universal Credit is implemented on a national scale. Worryingly, it appears that there is no automated system in use in the Pathfinders and is not clear when or how a system will be available.”

> It appears that UC has been developed on the basis of  “we dont know how to do something, but we hope we might stumble across a solution before the system is due to go nationwide.”

The official estimated benefit fraud rate is 0.7% of total benefits expenditure. The general public’s misperception is that it is some 34 times higher. To reduce the risk of confusion or conflation in media reporting, DWP should publish statistics relating to the estimated level of benefit fraud on a separate day from those related to error in the benefits system.

> Trouble is, neither the DWP or  elements of the media have any interest in presenting the true picture. They want to encourage the skivers image.

Dame Anne Begg MP said:

Statistics relating to benefit fraud are often conflated in media reporting with those relating to error; and people’s perceptions of the level of benefit fraud are completely out of kilter with the official estimate. This is not helped by the Government publishing all of the statistics simultaneously. Whilst we understand that the boundary between claimant error and fraud is not always clear, we believe that publishing separate summaries of estimated fraud and error rates would be helpful.”

On progress towards fraud and error reduction targets

Fraud and error rates have plateaued from 2005/06 to 2012/13, despite an “uncompromising” and “zero tolerance” approach announced by the coalition Government. DWP will only meet the target set in 2010, to reduce the estimated overpayment rate to no more than 1.7% by April 2015, if it employs innovative approaches which are aligned with the known risk factors associated with each benefit.

Dame Anne Begg MP said:

Despite DWP devoting considerable effort and resources to fraud and error reduction, rates have hardly changed since 2005/06 and estimated overpayments remain at around 2% of total benefit expenditure. If the ambitious target is to be met, innovative approaches are needed, not more of the same.”

On innovative ways of tackling fraud and error

DWP and HMRC should explore, with the Payments Council and the banking sector, the feasibility of establishing a system which flags up potentially incorrect benefits and Tax Credits payments, using data held by payments systems operators and banks on the types of payments due to enter individual bank accounts.

In the longer term biometric identity systems could have an important role to play in identity verification processes across government. The Cabinet Office is working on a government-wide system; the Government should evaluate the benefits of biometric identity verification in the social security system and more widely across public services.

Dame Anne Begg MP said:

DWP should adopt a secure and consistent approach to public and private sector data-sharing. This should include exploring the feasibility of a system that uses data held by banks and payment system operators to identify potentially incorrect benefit payments.

The Government should also carefully consider innovative identity verification technology, such as the voice-recognition system now used in Australian public services.”

On the implementation of the Single Fraud Investigation Service (SFIS)

The Committee recommends that SFIS, a DWP-run service which will investigate all social security benefit fraud across DWP, HMRC and local authorities, be implemented, as far as is practicable, in line with the roll out of Universal Credit. The Government’s current timetable for SFIS implementation would see responsibility for Housing Benefit fraud investigations transfer from local authorities to DWP before the Department plans to take responsibility for housing costs support under Universal Credit across the country.

Dame Anne Begg MP said:

“SFIS is, in principle, a good idea but it makes no sense to rush its implementation, ahead of the roll out of Universal Credit. As far as possible SFIS and Universal Credit implementation should be aligned, otherwise there could be increased risks of fraud in relation to housing costs support. The Government also needs to pause to allow negotiations with local government and the relevant trade unions about the transfer of staff into DWP.”

Source – Welfare News Service, 15 May 2014

http://welfarenewsservice.com/universal-credit-lead-increased-risk-benefit-fraud-say-work-pensions-committee/