TAX credit claimants have received nearly £90,000 in compensation after an Inverclyde-based company mishandled their claims, an official report has found.
American firm Concentrix, which has 125 locations in over 25 countries, including Faulds Park in Gourock, was hired to try and save more than £1 billion in incorrect or fraudulent tax credit payments, but saved less than a fifth of that target.
HMRC, the UK’s tax agency, terminated the contract, and now the UK’s National Audit Office (NAO) has said about 35,000 people had their payments stopped by mistake.
In just over two years, 108,000 people had their tax credits changed or stopped by Concentrix, according to the NAO report.
But almost a third of those decisions had subsequently been overturned, it said.
The report says that by mid-December 2016, HMRC had paid a total of £86,815 in compensation for complaints relating to cases handled by Concentrix.
The cases included a teenage mother who had her child tax credits stopped by the company after she was wrongly accused of being married to a 74-year-old dead man.
Senior figures from HMRC and Concentrix are to be called before MPs to explain the failures.
Concentrix bosses said this was ‘a hugely complex contract and programme’.
A spokesman said: “As the report highlights, a number of issues emerged at the outset which laid the foundations for the challenges experienced throughout, particularly last year.”
The firm was paid £32.5m during the contract, but told auditors it had made a loss of £20.5m on the deal.
An HMRC spokesman said: “We apologise to all those who did not receive the standard of service that they should have.”
Concentrix say that staff carrying out the work for HMRC will automatically transfer to the tax agency.
He said: “This will provide permanent employment, offering job security to them well beyond the scheduled expiry of the contract in May 2017.
“We do not expect any forced redundancies as a result of this transfer.”