Tax Recovery Hindered by Old Computers
We?ve all had it happen; a computer that we brought a few years back starts getting slower and slower until eventually it takes so long to load up Windows you might as just walk down to the nearest library to get online. You might expect businesses and especially the government to avoid problems like that, but they?ve actually got a very similar problem right now ? and it?s affecting their ability to police tax recovery in a number of areas.
Amazingly, problems with computers at HM Revenue and Customs not providing essential information could lead to a huge loss in tax revenue for the government. In fact, ?11.2 bn of the ?27.7 bn owed is unlikely to be collected at all ? quite a huge amount of lost revenue for a government cutting back on public spending.
A lack of funding in the tax system on behalf the government has come back to bite them and now they don?t have the facilities available to effectively collect tax.
The total tax intake in the UK was ?436 billion in the 2008/9 financial year ? a loss of ?22 billion of the previous year due to the economic climate.
Head of the Public Accounts Committee Edward Leigh said:
?HMRC’s efforts to recover debt are being hampered by its systems, which do not provide essential information such as a profile of debt across taxes. The money needed to upgrade systems would be well spent if it were outweighed by the amount of additional tax recovered.?
With new systems not being available and working until as late as April next year, there?s currently a backlog of around 17 million PAYE cases that on hold. Mr Leigh stated:
?The government will consider the committee’s conclusions and recommendations in detail and respond formally to the committee in due course?