8 June 2005

Michael Howard Helps Constituents Adversely Affected By Tax Credits Blunder

Michael Howard, Member of Parliament for Folkestone and Hythe, has intervened in the case of Jonathan and Sarah Harper of Folkestone, Kent who had been adversely affected by a computer error made by the Inland Revenue in calculating their Child Tax Credit and Working Tax Credit which calculated their award solely on Mrs Harper’s income.

Mr and Mrs Harper wrote to Mr Howard in November 2004 expressing concern that the Inland Revenue (IR) had sought repayment of alleged overpayment of CTC and WTC. Mr Howard wrote to the IR in November 2004 and received a response in December 2004 confirming that the IR maintained that Mr and Mrs Harper had been overpaid CTC and WTC but that their request for the recovery of overpaid tax credits be reconsidered due to the hardship it would cause was being investigated. In January 2005 the IR confirmed to Mr and Mrs Harper that they accepted that the overpayment was due to a mistake on their part but that the IR believed it was not reasonable for the Harpers to believe that their award was correct and that the IR would continue to recover the overpayment.

"Mr Howard wrote to David Varney, Chairman of the Inland Revenue, in March 2005 and received Mr Varney's reply in April 2005 which confirmed that the IR's error in calculating the award solely on Mrs Harper's income was spotted in August 2004 but that the amendments were not processed until October 2004". Mr Varney agreed that, having looked at all the circumstances surrounding Mr and Mrs Harper’s overpayment it had been decided not to seek recovery of it. Mr Varney explained that this was because the IR had made a mistake and, as the IR showed their correct household income on their decision notices, the IR accepted that it was reasonable for the Harpers to believe their award was accurate. Mr Varney also accepted that it had also taken far longer than the IR would have liked to correct their awards. The IR agreed to repay the monies already recovered from the Harper’s 2004-05 payments along with £100 compensation to acknowledge that the IR was the cause of their upset along with an additional £10 for the direct costs they incurred as a result of the IR’s mistakes & delays.

Mr Howard added: “I was pleased to be able to help Mr and Mrs Harper resolve this problem with the Inland Revenue. The Inland Revenue accepted that the overpayment was due to their error and that it was not unreasonable for the Harper’s to believe the award was correct. The recovery of the overpayment would therefore have caused a great deal of distress and difficulty to Mr and Mrs Harper. I am very pleased to have been able to help them resolve this matter with the Inland Revenue.”