TAX CREDITS: Dramatic rise in tax credit complaints. By Dan Martin

The number of official complaints about tax credits has risen almost threefold, new figures show.

In its annual report, the Adjudicator's Office, which handles grievances about HM Revenue & Customs (HMRC), said tax credit complaints increased to 569 during the 2005/06 financial year, up from 195 the 12 months before.

The majority related to disputed overpayments.

The office, led by adjudicator Dame Barbara Mills, said like during the 2004/05 tax year many complaints were generated as a result of computer problems, poor communication and complaints handling and a lack of caseworkers.

"Many complainants come to us because, when something went wrong, or even when they simply wanted more information, they were unable to engage effectively with HMRC to resolve matters," the report said.

"As a result, they lost trust in the system and escalated their complaint here. Many of these complaints could have been resolved earlier if there had been in place an appropriate level of customer support to facilitate effective communication and manage expectations."

However, the report showed there was a decline in the number of complaints being upheld. The figure dropped from 86% to 74%.

It said that this was because a rising number of claimants were providing incorrect information.

"The onus is on the taxpayer or claimant to read carefully the relevant notices and to check that the tax due, or the award, has been calculated on the basis of correct information.

"As a result, in many cases, we cannot uphold the complaint because it is clear that the complainant did not take notice of the relevant instructions and guidance."

The report also welcomed attempts by HMRC to improve its processes, particularly moves to give each complainant a single point of contact to deal with their case.

"If these new processes work as intended...the service to all tax credit complainants should improve significantly, with a resulting sharp drop in the number of complaints escalating here," it said.

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