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Inland Revenue Chief Admits Tax Credits Were A PR Nightmare

by Robert Lee, Tax-News.com, London

05 December 2003


Inland Revenue chairman, Sir Nicholas Montague told a committee of MPs this week that the tax credit debacle has “severely dented” public confidence in the tax authority, although he blamed much of the mess on the computer system installed by an outside contractor.

Giving evidence to the Commons Public Accounts Committee, Sir Nicholas said: "I accept public confidence has been severely dented. I very much regret the fact a lot of people who should have been paid on time were not."

However, the Revenue chief laid the blame squarely at the door of computer firm EDS, which was contracted to install the IT system for the new child tax credits.

"I expected EDS to provide a system that was stable and fit for purpose. I expected them to alert me if at any stage there was any reason to suppose the system would be anything other than fit and stable for purpose," he explained.

According to Inland Revenue figures, between March and August this year, some 17 million callers to the tax credit helpline were put on hold, with a further 17 million unable to get through at all, as the call centre queues were full. Furthermore almost 3 million calls were terminated by the caller in this time and only 7 million from a total of 80 million telephone enquiries were answered within twenty seconds.

"We will never get error rates down to zero. But I will be very disappointed if one did not see the halving of error rates with new tax credits," Montague announced.


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