Clause 29 - Incorrect statements etc.
Tax Credits Bill
5:45 pm
Mr James Clappison (Hertsmere, Conservative)
The image still in my mind is that of television. We have now had a demonstration of video equipment from the Minister, who has given a proficient demonstration of playback. I will not freeze frame but will endeavour to fast forward—back to the future—to clause 29, which is about fraud and negligence. We believe that fraudulent statements are more serious than negligent statements and should be dealt with accordingly; that is the purpose of new clause 10.
Amendment No. 69 probes the Bill's implications for negligent statements under the new tax credit arrangements. However, we wish to make fraudulent statements a criminal offence and ensure that they are dealt with as such under clause 29. In order to assist deliberation on the subject, we would like to know how many of the 478 penalties that were imposed for false working families tax credit applications since the system began in October 1999 were for fraudulent statements and how many were for negligent statements. We would like to have clear information about the operation of the penalty regime.
The Paymaster General recently told me in correspondence that the Inland Revenue was not recording information about how much was recovered through tax credit penalties. Until 26 October last year, penalties received as a result of tax credit investigation settlements and tax credit penalties were recorded as income tax. Only since 29 October last year have tax credit investigation settlements and tax credit penalties been recorded separately from income tax. The Paymaster General told me that, in the first two months of recording tax credit receipts separately—as penalties and settlements—the Inland Revenue collected £191,000 in settlements and £50 in penalties. We would like to have clearer information about that, and greater transparency in the system. We detest fraud, and no doubt that view is shared by all members of the Committee. As a criminal matter, fraud should be taken seriously, and we want to see it dealt with as a criminal offence.