The Inland Revenue has 70,000 staff, each with personal workstations. Over the past five years, more than 380 PCs have been stolen from the organisation, as well as 166 laptops. A further nine laptops have been lost.
"The Inland Revenue does not use cheap machines, so this probably amounts to £1m," said Norman Shaw, managing director of Eurotechnix, which sells software that tracks stolen laptops.
"I find it absolutely incredible that the Inland Revenue does not have some sort of adequate tracking or asset management system in place."
Shaw said the number of machines lost and stolen from the Inland Revenue is in line with industry averages.
"But the public purse is paying for this," he added. "As a taxpayer, it is far more worrying that the Inland Revenue IT team does not have an asset management system to keep track of their laptops and desktop machines."
The Inland Revenue said no disciplinary measures had been taken in the case of the nine lost laptops, although each case had been investigated. It said strict procedures are in place to secure its property.
Earlier this year, the Inland Revenue admitted that some members of its staff had gained unauthorised access to taxpayers' records, including those of celebrities.
In 2002, the Inland Revenue investigated 211 cases of suspected computer misuse and took action against 205 employees.Other public sector organisations have also found it hard to prevent their laptops being stolen. One US local authority in Virginia has installed computer tracing software on all portable systems to prevent theft. It began in December 2002 and since than has recovered 100% of all stolen equipment, said an official.