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HMRC claims extra £100m generated from Concentrix tie-up

AN EXTRA £100m in tax has been gleaned from HM Revenue & Customs’ ill-starred tie-up with outsourced IT firm Synnex-Concentrix, the tax authority’s CEO Lin Homer has told MPs.

Sitting before the Public Accounts Committee in a hearing on fraud and error, Homer defended the appointment of the US firm, which was hired on a payments-by-results basis in a contract worth as much as £75m over three years.

When asked by committee chairwoman Meg Hillier what Concentrix had delivered that HMRC would not have been able to, Homer (pictured) told MPs: “£100m we wouldn’t have otherwise collected.”

The £100m figure represents an astonishing turnaround after a July report from the National Audit Office found the benefits of the contract had been “lower than expected”, while HMRC’s own estimates showed project delivered savings of just £0.5m in 2014/15, compared with its original forecast of £285m.

“Delays in the service going live” and a lower-than-expected number of interventions completed by the supplier were cited by the NAO as key reasons for the meagre savings. In February, Accountancy Age exclusively revealed Concentrix staff did no work for nearly three months because of a systemic IT failure.

The original estimate of £1bn in savings over the three year contract is not achievable, the NAO found. HMRC currently estimates that the project will deliver savings of £423m – something Homer reiterated in the hearing – although that is reliant on increasing staff numbers and improving performance.

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