Child poverty campaigners call for next generation of tax credits to ‘build on progress’

Following the publication of new UK figures showing that tax credit overpayments have reduced by £700 million the Child Poverty Action Group (CPAG) in Scotland has backed calls for the UK Government to build on this improvement and introduce the ‘next generation’ of tax credits.

Latest figures show that the numbers of families overpaid in the UK has reduced from 1.9 million awards to 1.3 million, following reforms announced in 2005. Tax credits have played a significant part in tackling child poverty but overpayments continue to cause families difficulties. 116 000 families were still overpaid tax credits in Scotland alone in 2006-07. CPAG in Scotland, which provides expert independent training, information and advice on tax credits to frontline advisers across the country, say that now is the time to build on the reforms to introduce a more stable system. The charity is recommending the review of tax credits announced today considers:

• Paying childcare costs separately from tax credits
• Introducing fixed awards to reduce complexity and overpayments and increase stability of income
• Creating a face to face service for those who want it.

John Dickie, Head of Child Poverty Action Group in Scotland said:

‘Tax credits have helped to reduce child poverty in Scotland and across the UK, and this year’s figures show that the reforms announced by Government in 2005 have helped to reduce the number of overpayments. Now is the time to build on this to develop the next generation of tax credits, with more effective appeal rights, to provide families with more stable income.’

Media contacts:
John Dickie, Head of CPAG in Scotland on 0141 552 3656 mobile 07795 340 618

Notes for editors

1. Overpayment figures for the UK were published today by HMRC which show that the level of overpayment has fallen between 2005/06 and 2006/07, the period which covers the increased income disregard. The amount overpaid in 2005/06 was £1.7 billion, which fell to £1.0 billion in 2006/07. 1,902 thousand awards were overpaid in 2005/06 and 1,291 thousand in 2006/07. The Scottish figures show that 116,000 families were overpaid tax credits in 2006/07.
2. Today HM Revenue and Customs and HM Treasury have also published ‘Tax credits: improving delivery and choice a discussion paper’
3. CPAG in Scotland is a leading provider of expert independent information, training and advice on tax credits for frontline advisers across Scotland. CPAG is one of over 100 member organisations of the Campaign to End Child Poverty, campaigning for public and political commitment to ensure the goals of halving child poverty by 2010 and ending child poverty by 2020 are met.