TaxPersonal Tax£100m bill to catch-up on NI crisis

£100m bill to catch-up on NI crisis

The government is spending £100m on a huge catch-up exercise notifying state pensioners and prospective pensioners of deficiencies in their national insurance contributions.

Link: Tories propose return of the dividend tax credit

The crisis stems from a computer systems failure that dates back nearly 10 years.

Comptroller and auditor general Sir John Bourn revealed the extent of the catch-up operation in a report in which he qualified the National Insurance Fund’s accounts for 2003/04, because the Department of Work and Pensions could not produce the evidence required to verify incapacity benefit payments.

According to Sir John, the Inland Revenue only started writing to working age contributors, who should have received notices warning of deficiencies in their payment records, between October 2003 and November 2004.

During the year some 10 million notices were sent out and the annual production of deficiency notices – suspended by the former Contributions Agency in 1995/96 when the computer failure was at its height – restarted late last year.

The DWP has the more difficult task of writing to 670,000 people who have reached pension age and for whom there is an immediate impact on pension entitlement. It began the exercise last September and expects completion to take 12 months.

Related Articles

Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

Personal Tax Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

3w Alia Shoaib, Reporter
Rent-a-room relief – the survey says…

Personal Tax Rent-a-room relief – the survey says…

2m Helen Thornley, ATT Technical Officer
What should the OTS prioritise in its review of inheritance tax?

Personal Tax What should the OTS prioritise in its review of inheritance tax?

4m Alia Shoaib, Reporter
LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

5m Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

6m Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

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

7m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

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

8m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

9m Alia Shoaib, Reporter