§ Richard BurdenTo ask the Chancellor of the Exchequer (1) whether existing tax credit claimants will be expected to make contact with the Inland Revenue to request a form or give information regarding their earnings for the last tax year in preparation for a reconciliation of their tax credit status in April 2004; [135413]
(2) what action he is taking to ensure that the Inland Revenue applies lessons learned from the first year of operation of the (a) working tax credit and (b) child tax credit to the administration of those credits in time for financial year 2004–05;[135414]
(3) whether existing tax credit claimants will automatically be sent forms to complete regarding their earnings for the last tax year in preparation for a reconciliation of their tax credit status in April 2004; [135415]
(4) when he expects existing tax credit claimants to provide information about their earnings over the last tax year in order to achieve a smooth reconciliation of individuals' entitlements in time for April 2004. [135416]
§ Dawn PrimaroloThe Inland Revenue has reflected the lessons learned from the introduction of tax credits last April in the detailed design of the processes for finalising tax credits awards and renewing claims from April 2004.
The Inland Revenue will be writing to all tax credits claimants early next year to explain how the finalisation and renewals processes will work, and to let them know what they can expect to receive from the Revenue and how and when they would be expected to respond.
No claimant will need to initiate contact. The Inland Revenue will write to all tax credits claimants from April 2004 over a period of weeks explaining how they can finalise their award for 2003–04 and renew their claim for 2004–05, if appropriate.
Once contacted by the Inland Revenue, we expect two-thirds of claimants will need to provide details of their income for the previous tax year (2003–04) and confirm their circumstances over the period of their award.
The remaining third of claimants—families receiving only the family element of child tax credit—will not need to contact the Inland Revenue unless they have changes to report in their circumstances or income over the last tax year (2003–04). Because the level of their award would be affected only by a significant change in income, we expect that only a small minority of these claimants will need to report their 2003–04 income.
1100WClaimants who need to provide information will have until 30 September 2004 in which to do so. During this renewal period, tax credits payments will continue. Once the information is provided, the Inland Revenue will finalise the previous tax year's award (2003–04) and, if appropriate, set up the award for 2004–05.
If they do not have details of their actual income for 2003–04 by the deadline, claimants can provide an estimate by 30 September 2004. They will then have until 31 January 2005 to provide the details of their actual income.
There will be a comprehensive publicity campaign throughout the period to ensure that claimants are fully aware of what they have to do.
The Inland Revenue is also expanding the capacity of the Tax Credits Helpline to support the finalisation and renewals processes, with the addition of two new contact centres.
As set out in my answers of 7 July 2003 to the hon. Members for Arundel and South Downs (Mr. Flight), Official Report, column 583W and for Yeovil (Mr. Laws), Official Report, column 584W, the Inland Revenue's compliance strategy for new tax credits has been placed in the Library of the House.
§ Sir Archy KirkwoodTo ask the Chancellor of the Exchequer how many complaints he has received about(a) child tax and (b) working tax credit; how much compensation has been paid for errors; and what the (i) range and (ii) average amount of compensation paid is. [135933]
§ Norman LambTo ask the Chancellor of the Exchequer (1) how many compensation awards have been made by the Inland Revenue in respect of complaints about(a) child and (b) working tax credit; [136151]
(2) how many complaints seeking compensation have been received in respect of (a) child and (b) working tax credit; [136152]
(3) what the total value is of compensation awards made by the Inland Revenue in respect of complaints about (a) child and (b) working tax credits. [136449]
§ Dawn Primarolo[holding answer 4 November 2003]To the end of September approximately 1,600 claims had been paid out. This represents about one thirtieth of one per cent of all claims received for tax credit awards. The average payment was £30.