Taxman's £236m IT nightmare

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NEWS

The government has revealed that a total of £236m — exclusive of VAT — has been paid to both EDS and Capgemini for the IT systems behind the disastrous new tax credits system.

HM Revenue and Customs (HMRC) is currently in a stand-off with EDS over compensation for a litany of IT problems that led to massive overpayments and is threatening to take the supplier to court.

The tax credits system has been called a "nightmare" by MPs and a report by parliamentary watchdog the Public Accounts Committee has questioned HMRC's ability to rectify the problems.

The tax credits IT system went live in April 2003 under an outsourcing contract with EDS. When this contract ended Capgemini took over the running of the system from 1 July, 2004.

Paymaster general Dawn Primarolo has now revealed the full cost of the IT system in answer to a Parliamentary Question this week.

She said: "The identifiable costs paid to these suppliers for running the IT tax credits system up to 31 August, 2005, including costs in the pre 'go-live' stages, was £236m, exclusive of VAT."

Earlier this month HMRC repeated its threat to take legal action against EDS over the IT problems. The software errors are estimated to have resulted in overpayments to 455,000 households in 2003 totalling almost £100m.

Talkback

It's good to reveal such information to the public. Once more and more people become aware how much (tax money) is spend on what, why and how it's more likely that the (political) pressure will be on to actually deliver on what was promised earlier. And that finally full responsibility will have to be taken by all those involved. Because frankly, the world over the pockets of the few are filled by making empty promises, selling dreams and heavily caching in on the aftermath that follows that. Leaving the average Joe to (indirectly) pay for all what was overlooked.

via Facebook 27 October, 2005 23:03
Reply

An absolute disgrace. Everyone associated with this and every other failed EDS IT project should be sacked immediately, leaving room for other companies that can...

1 - Understand what's required
2 - Do realistic scoping and specifications
3 - Manage projects (their PM's must be rubbish)
4 - DELIVER!!!

Surely the people who contracted EDS to do this project can't still be working in ther respective roles, as if they are it's a complete sham! This is what gives IT a bad name... letting idiots manage the implementation of something that affects real lives, including people's ability to look after their families.

EDS?

Every Disaster Story!

via Facebook 28 October, 2005 13:25
Reply

Well its easy to make fun of EDS but I think their biggest mistake was not having the maturity to say no to unrealistic expectations from the client ! EDS gets dragged through the mud but what about the muppets in HMRC blowing away my taxes on an ill-planned project ?

via Facebook 28 October, 2005 16:41
Reply

As a "user" of the system, I find it is ill-thought out and planned. Why do I have to send them information the Inland Revenue already have -i.e. my taxable income and tax deductible spending?

It's like having to fill in a tax return twice a year, but ... £100 is £100, (more for lower incomes and those who pay for childcare), so we complain but have to do it anyway (eventually).

via Facebook 31 October, 2005 13:38
Reply

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