The government's tax assessment made by EDS in the US will not work
on the tax offices' new desktops leaving the government with the
option of calculating the tax manually.
Mike SimonsThe Inland Revenue may have to calculate self-assessment tax
returns manually following the failure of a software upgrade.
Software developed by Texas-based outsourcer EDS to calculate
1999-2000 self-assessment returns will not run on the new desktops
installed in Britain's 600 tax offices last year. The desktop
systems were introduced as part of the Millennium Bug-driven
Infrastructure (i2K) 2000 project.
EDS and the Revenue were struggling with the problem when EDS
director Alan Stevens and Nick Montague, chairman of the Inland
Revenue appeared before the Commons Public Accounts Committee last
month.
The two men presented a united front, discussing their prudent
use of established technologies and describing their relationship
as a model partnership between a government department and an
outsourcer.
There was no discussion of the problems with this year's
self-assessment software, though the Revenue was repeatedly warned
that delays in implementing Year 2000 solutions could leave it
vulnerable.
In February 1999 David Davies, chairman of the Public Accounts
Committee, described Revenue plans to replace key IT systems,
including 55,000 desktops, later that year as "staggering".
"The department," he said, "has given itself virtually no leeway
and tax revenues will be at stake. It is essential that the
department give consideration now to contingency planning."
In July 1999 Leader of the Commons Margaret Beckett, who led the
Government's Y2K campaign, "named and shamed" the Inland Revenue
over slippage in its date bug programme.
The i2K programme, the largest rollout of Windows NT4.0 in
Europe, was completed in time for the millennium, though many tax
office staff were extremely critical of the new system's
quality.
Some now say the delayed and problematic i2K rollout left EDS
with too little time to prepare this year's software upgrades.
The Revenue hopes a solution will be in place within two weeks.
"There is no question of asking EDS for compensation," said a
spokeswoman. "We are in the early stages of the tax year, which
means that few people will have submitted returns."
However, if the glitches persist the Revenue could face
difficulties as self-assessment returns flood in to meet the 30
September deadline.
John Whiting, deputy president of the Chartered Institute of
Taxation, said the Revenue's problems were "surprising and
worrying".
"Let's hope that a touch of over confidence hasn't crept in to
the relationship between the Revenue and EDS," he said.
Richard Shooter, chairman of the Institute of Chartered
Accountants' Tax Monitoring Group, added, "We have regular meeting
with the Revenue and we shall be trying to find out why this was
not sorted out before."