HM Revenue & Customs (HMRC) is to invest £156m over the next five years in an IT change programme to increase clerical accuracy, productivity and performance as well as reducing costs.

A report published today by the National Audit Office (NAO) says a push to automate clerical processes at the department has already been successful in reducing error levels.

The £156m investment is aimed at delivering efficiency savings equivalent to 3,000 full-time staff, says the report.

Modernised IT systems are also expected to deliver annual revenue benefits of at least £300m, including reduced levels of error in tax coding and calculation.

The main aim of the IT transformation is the automation of PAYE processes by integrating systems to provide a complete view of an individuals’ tax affairs by creating a single customer record.

It is hoped that the single customer view will eliminate errors and improve the speed of processing, as well as improving customer service through better resolution of customer queries.

The programme also includes developing an early warning system for emerging processing problems and separating out the more complex cases for processing.

A major challenge for the transformation project includes linking and extracting information from separate legacy systems to carry out the overall integration process.

According to the NAO report, HMRC wrongly taxed one million people in the year to April 2007 due to clerical errors.