Commenting on the Commons public accounts committee’s report on the 2009-10 accounts of HM Revenue & Customs (HMRC), South Norfolk MP Richard Bacon, a member of the committee, said:
“The failed implementation of HMRC’s new National Insurance and PAYE Service (NPS) in 2009 has caused ripples of chaos to spread throughout the income tax system.
“Software problems delayed the processing of the 2008-09 PAYE returns for a year and disrupted the issue of tax codes for 2010-11. HMRC tried to keep the volume of PAYE processing manageable by raising the recovery threshold from £50 to £300, throwing away £160 million of revenue in the process. HMRC also knew seven million taxpayers had either overpaid or underpaid tax in December 2009, but kept these taxpayers in the dark until September 2010, causing them worry and uncertainty.
“It is also extraordinary that the UK’s premier taxation authority failed to understand the Finance Act’s deadlines on collecting tax and so lost an estimated £650 million in underpaid tax.
“HM Revenue & Customs has failed in its duty to taxpayers to process PAYE accurately and on time. HMRC must get its act together and stabilise the PAYE system as soon as possible”.
HMRC’S Acting Chief Information Officer“People worried about their jobs will have every right to be angry over HMRC’s extraordinary largesse. HMRC could easily have planned for an orderly transition to its new CIO and it speaks volumes about the approach of HM Revenue and Customs that it did not”.
2 February 2011
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PAC REPORT: