THE BLOG

HMRC Should Pay Back All Debt Charges That Families Incurred From Concentrix

17/01/2017 07:59 GMT | Updated 17/01/2017 08:02 GMT

The final chapter in the devastating tale of HMRC's contract with Concentrix has now been published. It makes for grim reading for HMRC, Concentrix, and families in receipt of tax credits.

Concentrix was paid over £32 million by HMRC to root out fraudulent tax credit claims. It was expected to save the taxpayer £1 billion over the course of its contract. Yet, once all was said and done, less than a fifth of those expected savings were delivered.

Moreover, the company's 'cut first, think later' approach resulted in incorrect decisions being made on one in every three claims it investigated.

For those unfortunate families who lost out from Concentrix's game of Russian roulette, several months often went by in which they were without money to feed their children, before their claims were reinstated.

Some of those families put through purgatory by Concentrix were living in Birkenhead.

One constituent of mine had their tax credits stopped by Concentrix while they were in hospital giving birth. It was alleged that somebody had been living with them, although the person in question lived elsewhere. It took three months, and countless numbers of phone calls, before Concentrix withdrew their allegation and reactivated my constituent's claim. During those three months, my constituent had to borrow money just to scrape by.

Another constituent of mine was left to survive on one item of food a day after Concentrix alleged they were secretly living with somebody. In reality, my constituent had never met the person named by Concentrix. They were a previous tenant who had moved away from the area two years ago.

Likewise, a constituent of mine received a letter from Concentrix while they were in hospital recovering from an emergency operation. The letter required them to provide further information to justify their claim. My constituent did so once they returned home and HMRC assured them that their claim would be paid at its usual time. Yet their claim had actually been stopped by Concentrix. My constituent could not afford to feed their two children and they had to stay with a family friend.

It is, of course, important for HMRC to learn the right lessons from the series of problems highlighted in today's report by the National Audit Office. Its decision to keep all future tax credit-related decisions in house is a welcome first step.

But equally important is to reimburse my constituents and many others who faced months of desperation under Concentrix's reign, for the hardship they endured.

HMRC managed to rustle up £6.9 million to pay Concentrix for decisions that were eventually found to be incorrect. This dwarfs the sums offered by HMRC to tax credit claimants who were on the wrong end of incorrect decisions - between November 2014 and 2 December 2016, HMRC paid average redress of around £55 to a little over 1,500 families with Concentrix-related cases.

Some constituents of mine who had to borrow money at high rates of interest to meet essential outgoings have yet to be paid back the monies that were taken away from them by Concentrix, let alone be compensated for the nightmare they were put through by the company.

Although the final chapter in this tale has now been published, those constituents will still be struggling to pay off their debts, and the accompanying interest payments, several months from now. They might not even know they can claim compensation to help get their finances back on track.

So might I propose to HMRC that, as a postscript to the Concentrix tale, it proactively approaches those families whose tax credits were wrongly stopped with two offers: to pay back those lost monies as a lump sum or over a more gradual period; and to compensate those families in full for any additional charges, such as debt interest, that they incurred to ensure their children did not end up hungry or homeless.