Revenue & Customs cancels tax-claims computer project

Revenue & Customs cancels tax-claims computer project

Revenue & Customs has cancelled the launch of a new automated computer system to handle all PAYE tax claims until it "can be sure it will meet the demands placed on it".

The decision, aimed at preventing another Whitehall computer failure, one that could disrupt the collection of taxes from over 30 million people, was announced yesterday. No new date has been announced when the system - due to start to October - will be in place.

This comes in advance of a critical report from the National Audit Office today on a £2.6bn programme to modernise tax collection. The report questions whether HM Revenue and Customs will succeed in bringing savings worth £11.5bn by 2011 because of delays in implementing programmes and overoptimistic estimates that HMRC can collect all its taxes.

The report reveals low morale in the department with only 10% of civil servants employed there feeling "change is well managed" and only 15% believing "senior management provided effective leadership".

The department has been under fire for high levels of fraud and error in paying out child tax credits and the loss of 25m child benefit records.

It yesterday announced the closure of tax offices in north-east and south-east England and the Midlands to save money, provoking among staff and protests from the Public and Commercial Services union.

HMRC said: "Morale is beginning to improve from last November's low point. We are holding a number of events.....continued below

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where our senior team listen and respond to our people's issues and concerns ... We recognise, however, that we have to do more work to do. We need to maintain our pace and direction of change and ensure that staff and the senior team alike share a simple but compelling vision that we are working together to achieve."

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