TaxAdministrationMontagu takes another battering

Montagu takes another battering

Inland Revenue Chairman Sir Nick Montagu's job was under renewed threat today following a damning report by MPs on a year of chaos in the department.

Link: EDS faces tax credit penalties

His leadership was directly question by the House of Commons Treasury committee which set out ‘a catalogue ofsignificant administrative failures by the Revenue which Treasury ministers must address as a matter of urgency’.

By implication the Labour dominated all-party group also questioned the role of chancellor Gordon Brown and his ministerial team.

The report on ‘Inland Revenue matters’ highlights the massiveproblems over the introduction of new family tax credits, theunauthorised suspension of notices being sent to people whose national insurance contributions fell short of the amount needed for a proper state pension, and the sell-off of Inland Revenue and Customs and Excise properties to a company operating from an offshore tax haven.

The report highlights ‘a growing list of failures of communicationsbetween ministers and officials’ and condemns paymaster general DawnPrimarolo and Sir Nick, for failingto meet between late Autumn 2002 and March 2003.

The report by the Labour dominated committee concludes this inquiry has raised serious questions about how the department has been led.

Conducted by a special sub committee of the all party group chaired by former Tory minister Michael Fallon, the report demands that the 400,000 applicants for tax credit who received late payments – and in 220,000 cases have received no payment – be ‘compensated swiftly and in full’.

It condemns the failure of the helpline service to cope with demand and says the computer company responsible for failures in information technology that led to the crisis should be pursued vigorously for compensation.

The committee says it is ‘astonished’ that no minister was informedof the problems of ‘national insurance contributions deficiencynotices’.

The fact that they were suspended thus jeopardising the level of many people?s state pension without ministerial approval was described as ‘a striking example of the failure of some Next Step agencies to understand the nature of accountability to ministers’.

The report says this saga identified ‘multiple failings in theorganisation’.

It says that Revenue officials must inform ministers immediately infuture of problems and not hang on until a solution has been found.

The committee demands an urgent review of accountability andcommunications between the Revenue and ministers to prevent a repeat of the problems.

Mr Fallon said: ‘Our report sets out a catalogue of significantadministrative failures by the Revenue which Treasury ministers must address as a matter of urgency. It also raises serious questions about how the department has been led.’

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