HMRC has now written off £7 billion of the tax breaks over the past five years.
Errors in tax credits and tax fraud cost HM Revenue & Customs (HMRC) £1.5 billion in the last financial year, the National Audit Office has announced.
The newly-disclosed data means that the total number of tax credits - which offer breaks in payments for vulnerable groups such as pensioners and families with young children - written off by HMRC since 2003 has increased from £6 billion to £7 billion.
Moreover, the organisation has also confirmed that the amount of back taxes that needs to be claimed back from British families has increased by £400 million over the past 12 months, and now stands at £4.3 billion.
Commenting on the figures, Conservative MP and chairman of parliament's public accounts committee Edward Leigh said: "The amount being lost to fraud and error is still running to unacceptable levels, with between £1.31bn and £1.54bn paid out to claimants in 2006-07 over and above their entitlement.
"Since 2003, the scale of overpayment on tax credits has also been immense...vulnerable families who have been overpaid, already struggling within the current economic climate, face long-term repayments to the government through no fault of their own."
HMRC's tax credit programme pays out around £20 billion each year to a total of 5.5 million families.
