Fresh HMRC linkup possible after EDS deal

Fresh HMRC linkup possible after EDS deal HM Revenue & Customs could be
working with IT services company EDS in a significant capacity soon after
reaching a settlement in the tax credits row, it has emerged.

EDS resolved its dispute with HMRC this week, agreeing to pay £71.25m in what
was described as an ‘aggregate payment’ on Tuesday.

The company also has a contract with the Child Support Agency, which lasts
until 2010, and would work with the Revenue in a significant way again if the
troubled agency became part of HMRC’s remit.

EDS does currently work for HMRC, but it is only thought to be in a limited
capacity. Plans to merge the CSA with HMRC have been mooted by opposition
politicians, and Chris Pond, the former welfare minister, indicated at the
weekend that the CSA needed beefed up powers to target parents. A proposal to
use HMRC information is believed to be being prepared.

A spokesman for HMRC said: ‘This settlement does not reflect on other
government business. If EDS pitch for future work this doesn’t hang over them.’

The £71m settlement strikes a balance between the £50m EDS was thought to be
happy to pay to avoid a court case and the £100m HMRC was understood to be
seeking. The dispute dates back to July 2003, and earlier this year HMRC
indicated an intention to go to court to fight the claim.