HMRC, Tax Credits and the Concentrix Scandal

As part of a HMRC drive to reduce the overpayment of Tax Credits to claimants due to fraud and error, Concentrix were awarded a contract in May 2014 to review ‘high-risk’ tax credit claims – those identified as the most likely sources of fraud and/or error. After a two month delay, the contract eventually started in November 2014.

Concerns about the way Concentrix were conducting the reviews began to emerge almost immediately as they consistently failed to meet more than half of the contractual performance indicators each month from November 2014 to September 2015.

The problems began to make the headlines later in 2015 as the national press reported stories of Tax Credit claimants faced with bizarre Concentrix decisions. At least three single mothers had their Tax Credit awards stopped because Concentrix believed they were living with a partner. In each case, the claimants contacted Concentrix to confirm there had been a mistake and they were in fact single. In two cases, the name RS McColl appeared on bank statements so the claimants explained this was not a partner – RS McColl is a local newsagent – however Concentrix refused to accept this. In the third case, the claimant explained she lives in a property rented from the Joseph Rowntree Foundation therefore Mr Rowntree was not her partner but Concentrix again refused to accept this. All three claimants had to go through the lengthy appeal process to have their Tax Credit award reinstated.

The contract with Concentrix was terminated by HMRC in November 2016. Since then, HMRC staff have been dealing with the appeal backlog and have so far overturned almost one third of the Concentrix decisions in the claimant’s favour. The Select Committee report found “The human consequences of the Concentrix scandal are all too real. Vulnerable people have been put through traumatic experiences as a consequence of avoidable failures.”

Issues have arisen for PFP clients who have needed help dealing with Tax Credit demands for overpayments. Concentrix staff had initial difficulty understanding the disregards in place for personal injury awards, however all of those cases have now been resolved. It is hoped the findings and recommendations in both the National Audit Office and Select Committee reports will be followed by HMRC in the future.