IT Industry News: HMRC tax collecting hampered by IT systems

HM Revenue & Customs says it cannot afford the £250m it will cost to link the systems and improve the efficiency of its IT systems. MPs on the Public Accounts Committee (PAC) said that IT systems which are unable to be linked together are "major barriers to effective and efficient debt management".

It means that it is not possible to highlight taxpayers who have debts on multiple taxes as the tax records cannot be joined. In 2007/08, HMRC collected £450bn tax and National Insurance contributions from 35 million taxpayers. But on 31 March 2008 £17.3bn had still not been paid.

The department said that it would cost an estimated £250m to build systems that would link together every part of a taxpayers record because currently different systems hold the data for different taxes.

The PAC report said, "The systems are old and not compatible with each other so the department cannot readily establish how many taxpayers have a debt on more than one tax."

Despite being unable to build a new system, the report from the PAC says that HMRC is looking at ways of linking together tax debts using its existing systems, one example is by bringing VAT debts into its main debt management system.