Tax credits considered harmful

[drdoug]

I have a huge rant brewing about how evil tax credits are. They are the worst domestic policy enacted by any UK Government in my political memory, with the arguable exception of the Poll Tax and even then I'm not so sure. Possibly this is hyperbole but I'm very cross about it at the moment

Comments

[barakta]

Don't speak to me about the HMRC and tax credits. They've stopped mine because they're too illiterate and stupid to read my original letter explaining my change of circumstances.

I have received about 7 letters, each more incomprehensible than the last. I don't understand what they say, my English completely fails on them. They claim I am entitled to WTC, I am not entitled to WTC, I owe them 1900, or 1500. That reminds me I must find out if HMRC can touch my bank account without my permission.

So while they faff about, I'm down 25% of my income because they're too stupid to read. I'd much rather be paid properly, or have some better system than have to rely on WTC to make my income viable. I can't believe the stress it causes and you and I are both well educated and organised by the standards of things when it comes to paperwork.

With WTC I am better off working than on the dole. Without, I am MUCH better off on the dole... So really helping certain people off benefits *grr*.

[softfruit]

WSS.

I was on WTC for a while, and possibly am eligible again now, but find the online "well you might get about this much, or more, or quite a bit less, who knows" calculators I've seen to date don't inspire much enthusiasm.

Technically I think the council tax is a more godawful idea, but then I'm a sucker for Lib Dem propaganda about local income tax.

[barakta]

I found the online calculators told me I was entitled to about 75% less than I am. The people on the helpline are more helpful and gave me an accurate estimate.

Why is council tax a poor idea other than penalising a whole house if one member is not a student - or if there's one student + 1 doley why that isn't the same as two students, or two doleys? What's the libdem alternative?

[softfruit]

CT as a nearly-flat tax is not in any way proportional to income -- beyond basic level of what kind of house you are in. On 11k I pay £850 or whatever it is I'm paying at the mo, if my income doubled I'd still pay £850 but have far more disposable income and so greater ability to pay.

LD alternative is a locally set income tax so you'd pay typically 3% extra on the basic rate part of your tax bill. Which is a much less regressive tax. There are some fine problems to this: you'd need to set a higher %age in Kensington & Chelsea type areas than in say Burnley, since you have more high earners to get a good slice of money from per % tax. So you need some central redistribution too.

[makyo]

It fails my usual yardstick for this sort of thing, which goes something like: I'm fairly clever, certainly cleverer and better at comprehension and abstract thought than the average member of the population. I don't understand this, despite trying quite hard. Therefore it is certainly too complicated a system to be inflicted upon the general population (or indeed to be administered by similar).

[thekumquat]

Ditto.

Although given that they generally calculate PAYE tax OK (IME), I have to admit I'm confused as to why tax credits have to be so complicated.

[drdoug]

Straight-up tax is fairly straightforward to do the sums if you're pretty numerate. The sums for tax credits are similar to the system of allowances and bands for income tax, except you get an extra layer of complexity from the tapers (tax credits tail off with income). And the allowances are generally simpler with income tax too, for most people likely to be claiming.

[hfnuala]

I've never applied for them because I'm terrified my occasional bit of overtime would result in having to pay loads back. I realise this is silly but they are just too complicated for how money savvy I tend to be. I can get my head around allowances but not credits - I know there's a difference but don't understand it.

I like child benefit - non means tested, simple to understand. But at some stage some bastards decided to call it booze and fag money and so it was politically convenient to let inflation drop its value and replace it with this stuff instead.

[barakta]

Yes. They can't handle changes in circumstances they have a handful of stock phrases:
1) You are entitled to WTC
2) You are not entitled to WTC (sometimes from X date)
3) You are now working less than X hours per week (where X is sometimes not working at all).

They will send out multiple letters with combinations of the above in, which makes it even harder to decode what they think is and isn't happening.

I wouldn't be applying for WTC if I didn't need them for my basic living costs. I'm giving them another 3 days before I phone and shout at them some more possibly invoking the DDA for them not answering textphones or having an email address.

[drdoug]

Good luck with the fight, btw - am right behind you with dealing with the numpties.

[barakta]

Thank you! It's useful to know that I am not the only one having difficulties and indeed that I am not the only one to find the language used completely impossible.

There's possibly a DDA case that their forms and systems are too complex thus discriminating against deaf or learning disabled people with poor English. The lack of helpline access due to "too many calls" means those people can't access the right kind of help either... *ponders*

[meihua]

I agree entirely.

The best calculator I've seen is entitledto.

[randomstring]

With the same information:

* according to entitledto we're not entilted to anything
* according to the government link Doug gave above, we're entitled to £945/year tax credit and
* my best guess is that we should get the minimum tax credit about of about 500 quid/year

Sigh. I'm still debating if I can face applying for tax credits or not.

[drdoug]

This is not an unusual experience. And you and I are among the most numerate group in the country. It's a scandal.