Families fearful of claiming tax credits

Nearly £1 billion in tax credits is unclaimed from HM Revenue and Customs by families worried they would have to repay hundreds of pounds because of mistakes made by officials. The commons public accounts committee believes that one in three eligible people in parts of the country do not claim the credits. The committee blames the clawback of £770 on average from 1.3 million families in 2006. Since their introduction in 2003, £85 billion has been paid out in tax credits, but in the first four years of the scheme, HMRC overpaid £7.3 billion to some claimants and underpaid others by more than £2 billion.