Billions lost in tax credit scheme

The National Audit Office (NAO) has revealed that billions of pounds have been lost in fraud and overpayment of credits since the tax credit scheme was introduced in 2003.

Some £13.9 billion has been lost in a situation where overpayment or loss contributes to £2 billion every year, reports the Metro newspaper.

The huge figures have prompted reaction from opposition politicians, who have called for the scheme to be abandoned.

Liberal Democrat Work and Pensions spokeswoman Jenny Willott said: "The amount lost is likely to keep on rising if changes are not made."

"Tax credits must be made simpler. We need to return fixed awards which are easy to administer."

She highlighted the complexity of the tax credit system, which she said was "easily abused by fraudsters, misunderstood by claimants and mismanaged by officials".

The head of the NAO has refused to give a go-ahead to the latest set of accounts, but revealed a plan was in place to crack down on the errors and fraud.