TaxPersonal TaxEDS settles with HMRC for £71m

EDS settles with HMRC for £71m

IT supplier settles longstanding row with HMRC over the tax credits system

EDS is to pay HM Revenue & Customs £71m to settle its dispute over the
tax credits row.

HMRC has been in dispute with the IT supplier since July of 2003 over the
system it supplied, and had earlier this year indicated an intention to go to
court to fight the claim.

Talks to settle the issue came to a head recently, however. A court action
would have held dangers for both sides, with ministers likely to have been
unwilling to explain their actions in court, and EDS unwilling to continue its
dispute with the government, a key client.

The exact value of the settlement is £71.25m.

HMRC chairman David Varney said: ‘We have achieved a settlement of this
complex dispute with EDS agreeing to pay compensation. The tax credits IT
problems had an adverse impact on many tax credits claimants. We were determined
to reach a fair settlement for the taxpayer, and I believe that has now been
achieved.’

In a statement to the press, EDS said is was pleased to have reached a
settlement.

‘We were always focused on reaching an equitable settlement, said Doug
Hoover, EDS managing director for the UK, Ireland and Africa.

‘HM Government remains a very important client for EDS and we are pleased
that we have been able to settle this dispute without incurring the costs and
uncertainties of what would have been a lengthy and complex legal case.’

The settlement does not impact EDS’ prior financial guidance for the fourth
quarter of 2005 and full-year 2006, EDS added.

Related Articles

HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

1w Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2w Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

2m Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

4m Emma Smith, Managing Editor
Rangers tax case to have ‘dramatic’ consequences for football and business

Legal Rangers tax case to have ‘dramatic’ consequences for football and business

4m Emma Smith, Managing Editor
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

3m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

3m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

3m Alia Shoaib, Reporter