As the UK's Inland Revenue prepares to hand over its IT contract to a new supplier on Thursday, the accounting industry is bracing itself for a possible period of administrative chaos with the self assessment deadline fast approaching.
Cap Gemini is assuming the £300 million contract to administer the tax department’s information systems after the previous contract with EDS was terminated early in the wake of the tax credit debacle which left millions of low income families out of pocket.
Taxpayers and tax practitioners alike are hoping for a smooth transition in the light of the self assessment deadline which falls on July 31, but some observers fear that there is the potential for information to be lost or misrecorded during the changeover.
"It is inherent in the nature of the tax system that changes make it extremely difficult for any software provider to operate a faultless system. It is a mammoth task for any provider of software," Mike Warburton, senior tax partner at Grant Thornton was quoted as observing by the Daily Telegraph.
The changeover will involve the transfer of around 3,000 employees between EDS and Cap Gemini. The Revenue has said that it does not envisage that this will cause any problems and has announced that “good progress” is being made towards the handover.
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