What exactly is the point in the tax credit system? It seems to me just a way of confusing the tax system as much as possible so that people are so baffled they mess up their claims for what is rightfully, under the system, theirs. The system is also so complex that it makes it much more viable to fraud and also costs an unnecessary amount of money to administrate. There is little doubt that the scheme is haemorrhaging money due to fraud and admin - the Lib Dems claim that it has cost more than an incredible £9bn in its first three years - 50% more than previous estimates. Revenue & Customs, for example, have been unable to claim back more than £3bn it either sent out incorrectly or was defrauded on. Revenue & Customs have claimed that the Lib Dems are double counting and scaremonger - as if £1.5bn of public money is ok to lose then?!
Like the tax system as a whole, the tax credit system is a shambles. When the government pays out too much money it is coming back to poor families to claim it back, despite making the error itself. These families then have to pay back money they thought was theirs in the first place. Hardly a satisfactory solution. If these people are due tax credits, why are they taxed in the first place? Surely it is just over complicating everything and costing billions of pounds in the process. Another top idea from the man who will be running the country (officially) within weeks.