Tax credit company is dumped over errors

PEOPLE claiming tax credits will not have to deal with an outside company in future, the revenue body has said, following complaints that claimants’ payments were wrongly cut.

HM Revenue and Customs (HMRC) chief executive Jon Thompson told the Treasury Committee the revenue body will not be looking for a third party to help it “in any way” with the tax credit system, after deciding not to renew its contract with Concentrix.

The business services firm was brought in to cut fraud and error in the benefit system, but there were complaints claimants wrongly had their benefits cut and people were unable to get through on the phones.

Mr Thompson told the committee a fundamental issue appeared to be not having enough people on the lines to answer the telephones.

He said problems with people struggling to get through on the phones started in mid-August, but he was not alerted until three weeks later, on September 5.

He told the committee: “There’s a lesson there in that it took three weeks to get to me. But once we stepped in ... we deployed extra HMRC staff.”

The committee heard there had been stories about people trying to call 60 or 70 times, and that the vulnerable claimants included people fleeing violent partners and people whose children have disabilities.

As well as putting extra staff on phone lines, HMRC also took all new work away from Concentrix and 181,000 incomplete cases were transferred back to HMRC.