Inland Revenue charged £1m for causing 'worry and distress'

The Inland Revenue has paid out nearly a £1 million pounds in compensation to people who have suffered through delayed tax credits and payment errors.

A total sum of £940,000 has been sent to customers experiencing "worry and distress," in their claim of working family credits.

Such benefits were introduced last year by the government and are reserved for low and middle-income families.

The taxman says the sheer volume of the program means the price for apology does not come as a surprise - given that six million families now claim the help.

"With a project of this scale things will occasionally go wrong, but we make every effort to minimise mistakes," said the IR.

Errors like overpayment and late payment contribute to Revenue approved figures that reveal a total of £370,000 has been paid to consumers between April 2003 and April 2004.

More recently, Revenue sums have climbed with £570,000 distributed between April, and the end of last month.

Overall the figures point to a high success rate from those in distress as only 255 claims out of about 11,000 were refused.

This means claimants in the tax year 03/04 have a 97 per cent success rate when seeking compensation from the Revenue.

According to the IR complaints' code those unhappy with the service through payment error- whether too much or too little can be offered compensation for any 'worry and distress' caused.

But the Citizens Advice Bureau (CAB) responded, saying consumers often get stressed and angry in making a complaint, which the Revenue is already intending to receive because of previous poor service.

"I don't think people always follow a complaint through because of the time and effort and the stress involved," said Katie Lane, policy officer at the Bureau.

In an interview with BBC, the Citizens Advice Bureau added they're surprise as to why the one million figure was not even higher.

The Inland Revenue fails to specify the individual nature of complaints made, but it has set up a rigorous process in place to judge claims for similar problems, causing worry or distress.

If taxpayers reporting their problem feel the IR does not act accordingly, they can complain to the Adjucator's Office for a higher-level response.

Last month, the Revenue was criticized for sending 100,000 confusing letters to self-employed people, by 'warning' them how to get that tax return right first time.

The Federation of Small Business has called the enabling letter a "complete disgrace," for making taxpayers think their returns are wrong, when the vast majority are perfectly accurate.


22nd September 2004

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