HMRC And EDS Reach Settlement Over Tax Credit Fiasco
It emerged last week that HM Revenue & Customs (HMRC) and Electronic Data
Systems (EDS) have negotiated a settlement of HMRC's claim for compensation for
problems experienced with the IT system developed by EDS to support the 2003
launch and subsequent operation of Tax Credits.
HMRC and EDS have successfully concluded an aggregate settlement of £71.25m,
including an up-front payment and payments of additional amounts over time.
HMRC believes this to be commensurate with EDS's responsibility for the IT
problems which followed the launch of Tax Credits in April 2003. The specific
terms of the settlement agreement, however, are confidential. HMRC Chairman, David Varney, explained that: "We have achieved a settlement of this complex dispute with EDS agreeing
to pay compensation. The Tax Credits IT problems had an adverse impact on many
Tax Credits claimants." "We were determined to reach a fair settlement for the taxpayer, and I
believe that has now been achieved." .
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