Tax credits spot checks for the self-employed
HMRC have sent letters to 12,000 self-employed tax credit claimants as part of a campaign to target and crack down on suspected fraudulent tax credit claims from the self-employed. The letters follow an examination of the tax credit awards paid to the self-employed and asks for recipients to contact HMRC and provide evidence to support their tax credit claims.
HMRC have found that some 675,000 tax credit awards in 2008/09 had errors relating to income. The potential size of the loss has been estimated at £145m.
Tax credit claimants are reminded to tell HMRC promptly of changes which may result in an overpayment. A failure to notify HMRC can result in claimants having to pay back the money they have received or face penalties and imprisonment in cases of deliberate fraud.
This move is part of a wider crackdown on benefit and tax credit fraud by the Government. HMRC have also confirmed that they are using credit reference agencies and data-matching to spot patterns of fraud and are also employing additional investigators.