06 December 2002
Checks carried out by the Inland Revenue to assess the accuracy of payments by employers are not sufficient 'to provide the necessary assurance that tax credits are properly paid', the MPs say in a report published this week.
PAC chair Edward Leigh said: 'The audit arrangements for them should be no less rigorous than for any other payment. The department should act swiftly to rectify this anomaly, particularly as they have been unable to reconcile the payments made.'
Tax credits are available to people with children, or disabled people who work more than 16 hours a week. Around 30% of the credits – £1.3bn – are paid directly to employees by employers based on awards made by the Inland Revenue.
The MPs described as 'inappropriate' the fact that the auditor general has to rely exclusively on the Revenue's own checks on employers' records without being able to inspect them on his own account.
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