HMRC fails to meet its PAYE correction deadline

THE TAXMAN has failed to reconcile PAYE mistakes for 2008/09 and 2009/10 by its own 31 January deadline.

HMRC confirmed that it had processed only 92% of these cases by 31 January.

The Public Accounts Committee said in a report today that the department "failed to understand the risks of its poor quality data, which undermined the effective operation" by the NI and PAYE Service (NPS) computer system. It added that HMRC had hoped to complete the 2008/09 and 2009/10 PAYE reconciliations by January 2011.

The PAC criticised the department for the fiascos of 2008/09, 2007/08 and earlier years, which left an estimated £2bn of tax underpaid and £3bn overpaid. The debacle affected around 15 million people and left an estimated £2bn of tax underpaid and £3bn overpaid.

The "key risk" was "the ten million cases still outstanding where there are issues with data quality that require technical or manual intervention".

"We look to the department to be able to clearly demonstrate that it has resolved systemic data quality issues by the end of 2011 and that NPS is delivering the benefits that it was intended to bring - including improved accuracy and speed of processing, and prompt processing of under and overpayments," the committee added.

An HMRC spokeswoman said the department was unable to comment on any aspect of the PAC report until the report presented to Parliament.