A campaign to target and crack down on suspected fraudulent tax credit claims from the self-employed in Shropshire has been launched by HM Revenue & Customs.

Letters have started to hit the mats of 12,000 self-employed people in the UK who are claiming tax credits. HMRC teams have been examining tax credit awards paid to the self-employed and are writing to any whose claims may not be genuine or accurate.

They are asked to contact the department and supply evidence to support their claims.

The Government is warning more than 5,000 self-employed tax credit claimants in Shropshire and Telford & Wrekin to ensure their claims are genuine.

Failure to tell HMRC promptly of any changes in income can result in overpayment, which means that claimants have to pay back the money. They could also face a penalty and, in the case of deliberate fraud, criminal prosecution and imprisonment.

As part of a wider government crackdown, HMRC and the Department for Work and Pensions have published a strategy designed to tackle error and fraud in benefits and credits.

David Gauke, exchequer secretary to the Treasury, said: “HMRC is determined to take a tough approach to targeting possible fraud among tax credit claimants.

“Last year the Government launched radical proposals to reduce the billions lost to tax credit error and fraud every year. These losses are unaffordable and unacceptable.”

HMRC will now use credit reference agencies and data-matching to spot patterns of fraud. The department is also employing investigators to examine each claim in high-fraud areas.

HMRC says there are 3,700 self-employed tax credit claimants in the Shropshire Council area, with 1,300 in the Telford & Wrekin Council area.

Some 675,000 tax credit awards (8.9 per cent) in 2008/09 had errors relating to income. The potential size of the loss is £145m.

For details on Fraud and Error strategy see: www.dwp.gov.uk/newsroom/press-releases/2010/oct-2010/dwp138-10-181010.shtml

By Russell Roberts