Parliament looks set for Revenue systems debate

The government is likely to face a parliamentary debate later this year on the state of the administration and management of HM Revenue and Customs, including recent disclosures in Computer Weekly about delays in the processing of millions of tax and insurance records.

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The government is likely to face a parliamentary debate later this year on the state of the administration and management of HM Revenue and Customs, including recent disclosures in Computer Weekly about delays in the processing of millions of tax and insurance records.

Conservative peer Baroness Noakes, shadow minister for the Treasury and Work and Pensions in the House of Lords, told Computer Weekly she was likely to secure a debate this autumn. 

Noakes said she was concerned about an “accumulation of problems” which caused her to question whether HM Revenue and Customs was managing its  affairs satisfactorily.

Baroness Noakes was formerly a partner at KPMG, where she led its international government practice, and is a fellow of the Institute of Chartered Accountants. 

She has also tabled questions concerning disclosures in Computer Weekly about the Eric (External Routing Interface Component) system. 

Eric was due to be introduced in April ahead of legislation that mandated that larger employers submitted their annual PAYE returns online. Although the legislation came into effect on time, Eric was not ready to process the returns. Eric was designed to process and validate data on annual returns from employers. The annual returns tell HMRC how much tax and national insurance has been paid by millions of PAYE employees. 

Annual returns sent by EDI (Electronic Data Interchange) have been processed on Eric. But HMRC does not have enough confidence in Eric to let it process the bulk of returns sent online, by magnetic tapes or paper. 

As a result HMRC is delaying until later in the year the processing of 2004/2005 tax and national insurance records on millions of employees whose details were not submitted by EDI. 

With Eric delayed, HM Revenue and Customs set up temporary systems to tell employers that they had submitted correct data when the information supplied might have been wrong. 

Noakes said the likely debate would take in the debacle over tax credits, the problems with Eric and the Nirs2 national insurance system, how the department is implementing the efficiencies as recommended in the Gershon Review, and progress on the merger of Inland Revenue and Customs and Excise.

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