Tue, 1 Mar 2011

HMRC software flaws

HMRC’s National Insurance and PAYE Service (NPS) has been described as ‘flawed’ in a Public Accounts Committee (PAC) report published at the end of January 2010. The department was criticised for causing ‘unacceptable inconvenience to the taxpayer’ after £1.4bn of tax was underpaid to HMRC and £3bn of overpaid tax needed to be refunded.

The NPS’ software problems caused 2008/9 PAYE returns to be processed a year late. Incorrect tax codes were issued for 2010/11, and the department failed to process a backlog of 18 million PAYE cases from 2007/08 and earlier.

In its recommendations, the PAC said: ‘We look to the department to be able to clearly demonstrate that it has resolved systemic data quality issues by the end of 2011, and that NPS is delivering the benefits that it was intended to bring.’