HMRC ordered to ‘tighten up’ amid Brexit pressures

HM Revenue and Customs has been told to work harder against fraud and error in personal tax credits after overpayments increased to an estimated £1.46 billion as the department tried to get to grips with Brexit.

The rise to 5.7 per cent of overall tax credit exceeds the department’s own target of 5 per cent, according to estimates for 2017/18.

The National Audit Office (NAO) told the department to “do more to get a clearer picture” of the issue.

Preparations for Brexit and other demands caused HMRC to fail in making changes to tax credits to reduce error and fraud, the NAO said.

NAO head Gareth Davies said: “HMRC can do more to get a clearer picture of the causes of fraud and error in tax credits, the increase in self- assessment tax returns and what these mean to its costs and plans going forward. HMRC will need to do this against a challenging backdrop of preparing for the UK’S exit from the EU.”

The report comes after the Department for Work and Pensions was criticised by the NAO last month for the highest levels of overpayments and underpayments of the Conservatives’ flagship benefits reform, Universal Credit.