Clause 27 - Overpayments
Tax Credits Bill
5:15 pm
Mr Howard Flight (Arundel and South Downs, Conservative)
Clearly, we cannot have such a vague and woolly system. Those who are entitled to tax credits should be required to follow simple rules that they can understand—regardless of whether those rules address every conceivable matter of fairness. If the rules are not easy to understand, people will either be put off applying, or they will make mistakes. The situation will be a mess.
Those rules also need to contain a fair and firm system for the return of overpayments. If that system is loose and woolly, people will exploit it to the maximum. Logically, the system should operate in a similar way to the underpayment of income tax—but the other way around as, regrettably, people will probably be excluded from subsequent tax credits and
they will be required to make a payment if they no longer qualify for such credits.
To borrow the Minister's metaphor, if a black box—a television—was invented that would deliver a lovely picture if it was switched on, but nobody understood that it was a television or knew how to switch it on, I cannot see how it could operate. With regard to tax and tax credits, it is axiomatic that people should understand what they are—and are not—entitled to. They cannot have a dialogue with the Revenue—or with anyone else—unless that is the case.