Umbrella company contractors who receive tax credits or other financial assistance may be interested to learn that HMRC recently signed a deal with Experian to help it catch people who fraudulently claim tax credits and other benefits.
The Revenue and the Department for Work and Pensions have signed a one-year contract with the credit reference agency. Experian will use data matching methods to try and reduce the £770 million the government currently overpays because claimants fail to reveal partners or income when they submit their applications.
All means tested benefits will come under the spotlight, including Employment and Support Allowance, Housing Benefit, Income Support, Jobseekers Allowance and Pension Credit.
The coalition says it recently ran a pilot scheme, which saved it paying out more than £16 million in tax credits to fraudulent claimants. Fraud investigators are already looking into the first batch of cases identified by Experian.
Over the twelve-month contract period, the Revenue expects to save in the region of £700 million, while the Department of Work and Pensions hopes to save at least £100 million.
David Gauke, the Exchequer Secretary to the Treasury, said the tie-up with Experian would enable the Revenue to step up its fight against fraudulent tax credit claimants and make sure guilty parties are caught and punished.
Last year, Experian said that the government could save at least £1 billion if it ran comprehensive checks on claimants’ personal data. At the time, the company’s public sector head of fraud said that more than £17 billion was lost every year to fraud in the public sector.
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