HMRC announces delay to tax system rollout

HMRC will continue to use the older PAYE system

HM Revenue and Customs (HMRC) is postponing the launch of its new PAYE payroll tax systems because of concerns it would not be able to handle sufficient information by its October start date.

A new date has not yet been set for the system launch ­ a key part of HMRC’s efficiency drive to save £11.5bn by 2011.

Higher levels of automation have led to greater transaction volumes than originally forecast, said a spokesman for HMRC.

“We have decided to defer implementation while we make design changes to accommodate the higher volumes,” he said.

A report last week by the National Audit Office questioned whether HMRC’s overhaul would achieve the planned savings.

HMRC has also delayed the implementation of new compliance and enforcement, enterprise infrastructure and government banking systems ­ all of which have an IT element.

“According to the department’s risk monitoring, seven of the major programmes at March 2008 had issues requiring attention to ensure delivery of the benefits within the planned timescales,” says the NAO report.

The news comes in the same week that HMRC said it has fixed a security breach ­ revealed by Computing ­ in the existing PAYE system which allowed a business customer to see the personal details of another company.

In a letter to the affected customer, Mike Walker of the HMRC online customer support team said: “An urgent investigation was commissioned to determine the exact cause of the error you reported. Our in-depth investigation has identified the root cause of the error that you encountered.”

The breach poured further embarrassment on the department in the same week it was found guilty by the Poynter Review of “woefully inadequate” security procedures over the loss of 25 million child benefit records.

As a result of the review, HMRC will spend £155m on improving security over the next three years.