TaxPersonal TaxTaxman urged to sue EDS over £26.5m

Taxman urged to sue EDS over £26.5m

HMRC should pursue EDS over remaining elements of compensation deal on tax credits systems failures, MPs say.

An outstanding debt of £26.5m is unlikely to be paid to HMRC by EDS, a Public
Accounts Committee report published today said.

The IT company, charged with the responsibility of the tax credit system, was
told in 2005 to pay £71.25m due to errors that occurred in its introduction in
2003.

According to MPs the department should take EDS to court if the remaining
amount is not paid by the end of the year.

The contractor has paid very little of the remaining sum as it is dependent
upon winning future work from the government.

Edward Leigh PAC chairman believes that ‘if the full amount is not paid over
by the end of 2008 then HMRC must be prepared to return to the courts’.

Further Reading:

MPs report says tax credit system a failure

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