Problems with the Tax Credit System in the UK

Low paid workers in the UK are being forced into debt by the 2003 tax credit system.  This system was implemented as an integral part of anti-poverty measures; however it has created many problems for the lower income working class.

This new tax credit system is understaffed and flawed; not to mention incomprehensible to the average worker.  The difficulties with this system result from a variety of issues associated with the system. 

First off, the Tax Credit Office (TCO) is responsible for a large amount of the errors associated with the overpaid tax credits.  When these overpayments are later collected from the low-income workers, the workers are often forced into debt to counter the TCO’s error.  Also, the system penalizes workers who increase their salaries throughout the year.

New changes in the system should reduce some of these gross errors; however, the changes will not affect the families already forced into debt because the tax credit system was implemented with numerous inherent flaws. ■