Serious organised fraud leads to shut down of online Tax Credit service

6.18.00pm GMT Fri 2nd Dec 2005

Commenting on the revelation that Her Majesty's Revenue & Customs (HMRC) has shut down its online tax credit application service today due to its exploitation by serious organised fraud, Liberal Democrat Shadow Work and Pensions Secretary, David Laws MP said:

"This will come as a huge embarrassment for Gordon Brown just days before the Pre-Budget Report. On Monday, he will want to say what a success his flagship policy is, but this news is further proof that the system is in chaos.

"Ministers have led Parliament to believe that the level of fraud is somewhere in the region of just £30 million - I suspect the real figure is substantially higher.

"This complicated and chaotic system is wide open to fraud. Ministers have known for some time that organised criminals were using the internet to defraud the system.

"Ministers must now make a statement on Monday, firstly as to why they have taken so long to deal with the problem and why such drastic action is necessary. After all, many perfectly honest families will be applying via the internet and will be forced to join the massive queue of people hoping to speak to an adviser on the tax credit helpline."