You are here: silicon.com > Public Sector > News

IT at fault: Millions pay wrong tax amount

Paye system can't cope

Tags: nao, tax, hmrc

By Nick Heath

Published: 2 April 2008 16:14 GMT

Her Majesty's Revenue & Customs has promised to fix its computer systems after it was found to have incorrectly taxed up to five million UK citizens.

The report by the National Audit Office (NAO) found that up to £880m in pay as you earn (Paye) taxes had not been collected each year, while other taxpayers had overpaid by up to £340m.

It said that Paye systems were not "well suited" to somebody having more than one job and that its shortcomings were compounded by inconsistent working practices within the department.

HMRC admitted its Paye systems had difficulty coping with people who had more than job and said it would move its processing from its 12 regional databases onto one single national database during 2008-09.

An HMRC spokesman said: "This will bring together separate employments into a single customer record to create a single view of employees' tax affairs.

silicon.com Public Sector

Get the latest public sector news straight to your inbox. Sign up for the PS newsletter today!

"Our staff will have access to all of an employee's pay, tax, national insurance and pension information which will be all in one place. This will make our Paye processing quicker and more accurate."

He pointed to the NAO's findings that the HMRC calculates the correct amount of tax in 95 per cent of income tax cases and has improved its processing of income tax returns.

The spokesman said the department was automating and tightening many of its processes and introducing checks on employee starter and leaver information.

The NAO said in its report that IT systems were "not well suited to the efficient administration of income tax where people have more than one job or change jobs on a regular basis".

It added: "These difficulties have been compounded by inconsistent working practices within the department as a consequence of staff not being aware of or failing to follow departmental procedures."

The NAO said problems stemmed from tax records being structured around jobs rather than around taxpayers.

  1. Zones
  2. Management
  3. Networks
  4. Software
  5. IT Services
  6. Hardware
  1. Verticals
  2. Public Sector
  3. Financial Services
  4. Retail & Leisure

silicon.com Public Sector
Get the latest public sector news straight to your inbox. Sign up for the PS newsletter today!


  • Jobs
IT017764

Please note: even if you don't have exactly the background indicated, do contact us now if this type of job is of interest - we may well have similar ...

Manager of Global Relocation Services

Strong working knowledge and/or become proficient with expatriate tax, compensation and benefits. Employee relocation benefits administration and ...

Payroll Team Member

s, starters and leavers - Ensuring accurate and prompt payment of salaries - Supporting the Payroll Team Leader - Handling high volume of employee ...

Nick Heath
Let's shine a light into the public sector IT money pit
With £16bn being spent, why is productivity still falling?

Tim Ferguson
BBC is taking tech seriously, so give it a break!
Auntie is the envy of the world but doesn't get the credit it deserves at home...

Peter Cochrane
Peter Cochrane's Blog: Open info for all?
Government stonewalling citizens

Nick Heath
Home Office CIO on taming tech and why ID cards are good news
Interview: Annette Vernon, Home Office CIO

Nick Heath
NHS records, Google and Microsoft: Where do you want your data?
Politicians: Heal thyself

Alan Hunt
NHS network: Time to get secure
Patient data in need of a check up

Agenda Setters 2009
Welcome to the ninth annual Agenda Setters poll – silicon.com's list of the top 50 most influential individuals in the technology and IT industries, from techies and CIOs to entrepreneurs and business leaders. Find out more in our latest special report.




Quick Sitemap Links: