Quote:
Originally Posted by Chris
The tax credits system was wide open to abuse because it was run by HMRC which never had the DWP’s expertise in managing benefits assessment. It is progressively being replaced by universal credit which is run by the DWP so it’s much less of an issue now. It was possible under the old system to get a pretty hefty tax credit payout by registering as self employed, doing very little and then claiming to work 30 hours, but reinvesting all the profit in getting the business established. It seems that as long as the tax credit claim was matched by a credible tax return HMRC never bothered to check.
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Exactly. With UC, a notional income is applied whether received or not after a year (currently suspended due to covid) to deal with this.
I had a taxi driver saying he worked 16 hours for £1 an hour (yeah right). After the minimum wage came in, I said that I expected him to pursue the minimum wage that he was entitled to because I was going to use this notional figure on his claim whether he did or not. The following week, he said that he only worked for two hours a week for about £16. He was referred straight to fraud for trying to insult my intelligence alone.
They observed him, found that he was working over 16 hours a week and got the clam closed because he was excluded from the benefit that he was claiming. By being greedy he lost everything.
He wasn't an EU immigrant though (he was Asian), what EU migrants did was to register as self employed for 16 hours a week to get Tax Credits as things like scrap metal collectors, but miraculously they hardly ever found any scrap, so received the maximum Tax Credits available.
Thieving scroungers they may be, but they're not stupid.