Minister sidesteps tough questions on tax systems


Minister sidesteps tough questions on tax systems

Tony Collins

Efforts by MPs to discover the lessons from IT-related disasters at HM Revenue and Customs were rebuffed last week by a minister who claimed a need for confidentiality because of a possible court case against EDS.

At a hearing of the House of Commons Treasury sub-committee, Dawn Primarolo, the minister responsible for HMRC, avoided direct answers to a series of questions about problems with the organisation's IT systems.

Her response came despite a series of problems besetting HMRC. Last month, the National Audit Office qualified HMRC's accounts because of problems with the tax credits scheme. The Revenue is struggling with the aftermath of a four-month delay in going fully live with a core PAYE system and has postponed the launch of an online filing system for construction employers.

Primarolo repeatedly cited a dispute with the department's former supplier EDS in her responses to questions from MPs about IT-related problems.

Liberal Democrat MP Susan Kramer asked Primarolo why there were no back-up systems to cope with the IT and administrative problems that followed the introduction of a tax credits system in April 2003. She did not give a direct reply and referred to the dispute with EDS.

Primarolo said it could take a year to modify the tax credits system to suspend automatic action to recover overpayments.

And she apologised to claimants who had received a poor service from HMRC - nearly two million people have received overpayments. But she described the payment of tax credits to about six million people as a "great success".

Primarolo was also asked about the lessons learned from the delayed introduction of Eric, a system to validate information and route messages about the £108bn paid each year by employees in tax and national insurance contributions.

During this year Computer Weekly has highlighted the negative impact delays in introducing Eric have had on employers and payroll agents. The delays have affected the Revenue's ability to collect taxes and pursue underpayments, according to the department's internal e-mails.

Eric was was introduced by Capgemini after it took over the Revenue's IT outsourcing contract from EDS in July 2004.

Without referring directly to Eric, Primarolo again cited the dispute with EDS for not discussing the lessons learnt.

Talks with EDS over compensation began in 2003, and since early this year the Revenue has threatened repeatedly to take the supplier to court. As yet there is no sign of this happening.

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