Software makes £4m tax error

A software error at Aberdeen City Council resulted in a total of £4m being withdrawn from 32,000 council taxpayers' bank accounts...

A software error at Aberdeen City Council resulted in a total of £4m being withdrawn from 32,000 council taxpayers' bank accounts on Christmas Eve - more than a week early.

The council was forced to promise to pay bank charges incurred by citizens whose bank accounts became overdrawn as a result of the error and to make loans available in case of financial hardship.

The error resulted from a software problem on a newly implemented council tax system. Payments were withdrawn from citizens' bank accounts on 24 December instead of 5 January.

The software produced an invalid date for processing direct debit payments - putting dashes where zeroes should have been. Because the council's Bacs processing systems did not recognise the format, the payments were scheduled for the next available processing slot.

In the event, loans were unnecessary as council IT staff were able to fix the problem and the money was returned by 27 December.

An Aberdeen City Council spokesman said, "It was a basic error - someone put in the wrong date. The council offered to foot the bill for charges incurred. The offer of loans was not taken up and the money was returned on 27 December."

John Porter of the council's finance committee said, "It was a premature call which was noticed in good time, thankfully, as at this time of year people's accounts are finely balanced. It should not have happened and we will be looking into making sure it does not happen again."

In a similar incident, Glasgow City Council took £4.5m from taxpayers a day early on 27 December when an incorrect date was keyed into its direct debit systems.

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