Enhancing Tax Credit Accuracy: Discrete Event Simulation for Error Identification
This presentation, delivered by Laura Glasstone on September 22, 2009, explores the intricacies of Tax Credits, specifically Child Tax Credit (CTC) and Working Tax Credit (WTC). It examines how discrete event simulation can be utilized to identify errors within the claims process, drawing from Lean management principles. Key topics include the rationale behind using simulation, "what-if" scenarios, resource usage, and the overall effectiveness of interventions. Attendees will gain a clearer understanding of the tax credit system and the challenges involved in ensuring accuracy and efficiency.
Enhancing Tax Credit Accuracy: Discrete Event Simulation for Error Identification
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Presentation Transcript
Increasing understanding of Tax Credit error: Using discrete event simulation to identify where errors enter the process Laura GlasstoneTuesday 22nd September 2009
Outline • What are Tax Credits? • Original work request • HMRC and Lean • What is simulation? • What If scenarios • What has modelling achieved? • Questions
What are Tax Credits 2 elements of Personal Tax Credits: • Child Tax Credit (CTC) • Working Tax Credit (WTC) • Introduced in 2003
What are Tax Credits 2 elements of Personal Tax Credits: • Child Tax Credit (CTC) • Working Tax Credit (WTC) • Introduced in 2003 • £20 Billion paid out in 2007-08 • 4% of total revenue collected • Why am I using simulation?
What is Lean • Generic process management philosophy • Developed by Toyota and known as lean since 1990’s • 5 step process where the principle is to create more value with less work
What is Simulation • Discrete event simulation is a technique that mimics the operation of a real or proposed system. • Simulation models are time based and take into account all the resources and constraints. • Simulation also builds in the randomness. • Simulation can be used to show the eventual real effects of alternative conditions and courses of action
“What if” scenarios • Observe the impact of experiments and changes to the system • Check all claims as they come in • Check all attached documents and use them as/when they come in • Increase the number of staff • Decrease time taken to complete tasks
What has modelling achieved? • Explore “what if” scenarios. Are interventions effective? • Given an overview of the entire claim process • Identified resource usage • Identified queues/ areas of interest • Testing the timeliness of the agreed HMRC targets
