Primarolo admits delays linking tax returns to National Insurance and incorrect Deficiency Notices
Computing, 06 Feb 2007
Incorrect pensions information was sent out last year because of computer glitches at HM Revenue & Customs (HMRC), paymaster general Dawn Primarolo admitted this week.
The breakdown was disclosed in reply to questions in the Commons from Liberal Democrat shadow chancellor Vince Cable following 'difficulties' with a system supporting employers' electronic submission of Pay As You Earn returns online for 2004-05.
Primarolo admitted that 120,000 returns – 13 per cent of the total – 'were accepted with errors that would normally have been rejected' which required manual work by HMRC staff before they could be correctly processed.
'This has continued to delay some data getting on to the National Insurance Recording System (Nirs),' she said.
'HMRC endeavoured to get all the 2004-05 data posted through to Nirs prior to the commencement of the Deficiency Notice exercise on 11 September 2006, but we did not succeed.
'4.7 million Deficiency Notices were issued to customers and although the vast majority of these letters were correct, some contained incorrect information due to the late processing of returns,' said Primarolo.
The notices are important to contributors because they indicate to those approaching retirement whether they need to make additional contributions in order to qualify for a full state pension.
The problems are further evidence of the woeful performance of public sector IT, says Cable.
'This is another example of the inability of the government to handle anything to do with computers competently,' he said.
'It is another HMRC software failure which has had unfortunate consequences.'
He said the tax authorities promoted on-line filing and 'totally underestimated' the numbers that would take it up and the level of errors.
The number of online self-assessment tax returns filed by the deadline at the end of January rose 40 per cent. Nearly three million people used the system this year, compared with 1.6 million last year and 1.1 million in 2004.
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