HMRC blames tax fiasco on internal blunders

Around a million Brits will be told that they will have to cough up around £600 following yet another HMRC tax fiasco.

Carrying out a check on changing tax codes over a number of years, an IT system has shown that many people have been paying too much or too little tax to the government up to 2008.

An HRMC representative told us that there were indeed problems with the merger affecting the interoperability of systems, and the Department had worked hard alongside Capgemini to resolve these. Last year we reported that Capgemini was paid £1.75 billion by the British government.

Some individuals will receive a letter over the next few months telling them they’ve got an extra 300 quid on the way. Others face more unwelcome news, in these austere times which we’re all in together, as the economy dips and inflation creeps up.

Of course, it is not the first time that HMRC has called on the citizens of the UK to reach into their pockets to find some extra cash.  A similar situation happened last year with 1.4 million people flagged as having paid too little.

The palaver follows HMRC’s new IT system, which it tells TechEye was up to 12 independent systems that had been working on their own for an age. 

The new computer system aims to bring all records into one database, making it easier to monitor tax status changes.

Speaking to TechEye, an HMRC spokesperson claimed that reports in the press are inaccurate, and that the IT system isn’t at fault for the latest debacle.

“The problem has been when people change their tax code as they move around after school, for example, and take up different jobs,” the spokesperson said. “With the number of systems before, sometimes cases fall between the cracks. The new system aims to bring this all up to date.

“The IT system itself is working exactly as it should.  This is not an IT fault”

Problems that resulted in cases “falling between the cracks” are not likely to go away, despite assurances that the new system is getting records up to date.

TechEye was told that serious problems affected the computer systems of HMRC when Gordon Brown oversaw the merger between the Inland Revenue and Customs.

However the HMRC spokesperson denied that this had any impact on current discrepancies.

He told us that there were indeed problems with the merger affecting the interoperability of systems, and the Department had worked hard alongside CapGemini to resolve them. However, these did not contribute to the current tax rebate problems as it’s an in-house Inland Revenue concern. 

Ultimately, taxpayers are at the mercy of HMRC staff and human folly, ensuring that cases are dealt with appropriately.

The spokesperson continued: “Sometimes we get it wrong and don’t always act with enough haste, and there will always be some discrepancies if we fail to act quickly, or employers fail to notify us.

“We hope to limit these cases, but we recognise that mistakes are made on both sides.”

Not good news, then, for the winners of the Unlucky Lottery who will be forking out. Evidently, there’s cause to believe such discrepancies will pop up in the future.

According to the Taxpayers’ Alliance, the public will fear for similar demands in the future.

“These errors are occurring with alarming frequenc,y so of course taxpayers will be worried that it’ll happen again, and that next time they’ll be liable,” John O’Connell, Research Director of the TaxPayers’ Alliance, told TechEye.

“New IT systems seem to be causing more confusion rather than solving problems – they are blamed on one hand but praised for rooting out errors on the other,” Connell said. “The result is that taxpayers are forced to hand over a large amount of cash that they didn’t expect to, which adds to the woes of high inflation, spiralling fuel costs and eye-watering utility bills.”

Connell calls for a simpler approach, or the public as a whole risks paying for HMRC’s faults again and again : “The tax system needs to be drastically simplified to make it easier to administer and reduce the burden on hard-working families, but until then HMRC must work a lot harder to stamp these errors out and end the misery that they cause.”