Tax dodgers aided by old IT
£11.2bn could be lost
A decision to delay investment in a new IT system means the taxman has a poor grasp of the billions he is owed, according to an influential group of MPs.
The Public Accounts Committee today said some £11.2bn was at risk of being lost to the Exchequer because HMRC deferred buying a new debt management system in favour of "other priorities".
"Weaknesses in the Department's existing systems prevent it from analysing debts by age and value and from calculating a taxpayer's total debts across all taxes," the PAC said.
The MPs recommended HMRC reconsider its decision and replace its debt management system.
"An effective debt management system would improve the Department's ability to recover debt by providing a profile of debt across taxes by age, value and risk of recovery," they said.
"With £11.2 billion at risk of non-recovery, the benefits of investment in a new system could easily outweigh its cost."
The PAC was also critical of a backlog of 17 million Pay As You Earn cases awaiting processing. It said HMRC should aim to clear it by March 2011.
The full PAC report is here. ®
Time to reap what they sowed
Perhaps they should have thought of that before signing an extension to their contract with Crapgemini resulting in hundreds of job losses and demoralisation of those who remain and support all those antiquated compliance systems. Plus Labour's pathological need to change the tax rules every goddamn year, adding stupid exceptions, tweaks, special cases, and throwing bones to politically expedient causes makes compliance an utter nightmare. What's the bet that without budget to pay for change requests to bring them into line with the new tax rules, all these systems are throwing false positive (or letting through false negatives) all over the place.
"With £11.2 billion at risk of non-recovery". Is that 11 billion based on the assumption that everybody is fiddling the maximum they can being caught? As most people are honest I suspect that figure is drastically smaller in reality.
Well, if they can do without the dosh
Why keep the law mandating those taxes on the roll anyway? Oh that's right, taxes are there to squeeze money out of citizens, not because they are needed to fund anything important, so you might as well piss it away to your industrial friends in the name of "creating jobs".
Note how they're apparently pushing for some expensive ERP/CRM type system. Those are really useful and can be depended on to deliver on every promise, as el reg readers know so well.