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MPs slap HMRC for lack of joined-up IT

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Her Majesty's Revenue and Customs has said it cannot afford the £250m required to join up its disparate IT systems so it could create a single tax record for every taxpayer.

The Public Accounts Committee investigated how the Revenue could do a better job of dealing with tax debt. The Revenue was owed £17.3bn on 31 March 2008, on total tax and National Insurance contributions of £450bn - some £4.5bn of this debt was more than a year old.

The Committee recommended HMRC use risk scoring to identify people who had simply forgotten rather than engaging in deliberate late payment. The Revenue is also unable to link different types of tax owed by the same taxpayer.

The Committee said the Rev's inability to look at a single taxpayer record were "major barriers to effective and efficient debt management".

It was also criticised for not measuring how cost-effective its various debt collection activities were, and for only working 9 to 5.

HMRC should also look at taking different payment methods; it only recently allowed payment by credit card and the setting up of direct debits by phone and online.

The Committee was also highly critical of the compensation deal worked out between EDS and the Revenue which was dependent on EDS winning future government contracts - something the Committee has previously warned against. After the failure of the tax credit system EDS agreed to compensate the Revenue - but only if EDS won future government contracts.

EDS agreed to pay £26.5m over three years dependent on it winning new contracts with other government departments. But because not all these contracts came through, EDS only paid £978,705 over the three years.

After EDS got taken over by HP it made a final lump payment in January 2009. The Committee noted that EDS was under no legal obligation to make this payment when it did.

Full report is available from here (pdf) ®

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