If you watch enough Channel 5 programmes, you may think that vast swathes of the country are ‘scrounging’ off the state and committing benefit fraud. But the government’s latest figures show that this is not exactly the case.
HMRC has released its revised estimates of benefit fraud and error for child and working tax credits for 2015/16. It found that it paid out [pdf, p3] a total of £28.3bn in tax credits in that financial year. But the figures on benefit fraud and error are somewhat small.
HMRC said the total “level of error and fraud favouring the claimant” was £1.35bn; just 4.8% of the total tax credits bill. In detail, it found that [pdf, p4]:
- Error favouring the claimant was £1.03bn; 3.7% of the total tax credits bill.
- Fraud favouring the claimant was £320m; 1.1% of the total tax credits bill.
These were HMRC’s “central” estimates. It produced [pdf, p4] higher and lower ones, to allow for error:
HMRC says [pdf, p5] the majority of money paid out in error was due to mistakes by claimants. The majority [pdf, p5] of these were claims where the claimant was in work, with children. The reasons for errors favouring the claimant were [pdf, p7]:
Read on...Support us and go ad-free
Benefit fraud vs tax evasion: you decide
Originally, in June 2017, HMRC said [pdf, p2] that error and fraud cases amounted to £1.57bn, or 5.5% of the total tax credits bill. But it revised this figure down because of “new information received”.
But it’s not just tax credit error and fraud levels that are lower than you may think.
Like HMRC, the Department for Work and Pensions (DWP) also estimates fraud and error for its benefit payments. Its most recent estimate shows [pdf, p3] that overpayments to claimants in 2015/16 were £3.3bn, or 1.9% of its total bill.
Meanwhile, HMRC estimated the amount of tax avoided, evaded and unpaid by people and companies in 2015/16 was £34bn – more than the whole tax credits bill. Maybe Channel 5 would like to bear this in mind when it’s deciding on what programmes to do about ‘benefit cheats’.
– Join The Canary, so we can keep holding the powerful to account.
Featured image via Kays No1Fan/YouTubeSupport us and go ad-free
We know everyone is suffering under the Tories - but the Canary is a vital weapon in our fight back, and we need your support
The Canary Workers’ Co-op knows life is hard. The Tories are waging a class war against us we’re all having to fight. But like trade unions and community organising, truly independent working-class media is a vital weapon in our armoury.
The Canary doesn’t have the budget of the corporate media. In fact, our income is over 1,000 times less than the Guardian’s. What we do have is a radical agenda that disrupts power and amplifies marginalised communities. But we can only do this with our readers’ support.
So please, help us continue to spread messages of resistance and hope. Even the smallest donation would mean the world to us.