back to article Rev slammed for PAYE failure

Her Majesty's Revenue and Customs failed in its duty to provide a proper computer system to work out how much Pay As You Earn taxpayers should be paying. In reality HMRC was unable to process PAYE in anything like real time and has now run out of time to collect tax owed from before April 2007. The Public Accounts Committee …


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  1. Debe

    The only real way forward for HMRC

    Staff HMRC completely with chimps, I believe that this will increase efficiency (from its current levels anyway) and improve public approval (especially if you make them wear suits, who doesn’t like the PG Tips adverts! Think of a whole government department staffed with them! Brilliant!) Plus you can pay them peanuts.

    Penguin.. because penguins would also be an improvement, and bring their own suits.

  2. Jacqui


    If you work in IT, you have been and for the next few years will be impaled on the tax mans need for cash. Best response is to move abroad. My choice is canada, it is not perfect but very few places are currently worse than the UK. Escpecially if yiu have been hit with some insane notice by the tax man.

    Why shoudl *I* pay for their incompetence?

    1. Fuzz

      enjoy canada

      I hear they've just introduced usage based billing for Internet connections at $1.90 per Gigabyte

    2. This post has been deleted by its author

  3. Nigel 11

    1.4 billion ....

    So, the cost of this failed IT project is 1.4 billion lost revenue.

    How much would it cost to have not computerized at all? 1.4 billion is 70,000 clerks earning 20K per annum. If each could process a mere 500 taxpayers' PAYE per annum, that's 35M, probably about the number of PAYE taxpayers in the UK. About two per working day ....

    So one answer is scrap the computer, take 70K people off the dole (immediate extra saving), buy 70K calculators, print up 35M worksheets, and do it all manually.

    Some sort of joke, but not very funny.

    1. Anonymous Coward
      Anonymous Coward

      1.4b = 70k clerks

      So these clerks need neither offices, equipment or support services?

    2. Anonymous Coward
      Anonymous Coward

      Re: 1.4 billion (aka pointless mathes)

      While 70k clerks would cost £1.4B, their managers would probably require an addition £800M (my guess is one manager per 5 subordinates resulting in ~87,500 staff with managers pay increasing by £20K per level and 7 levels of management).

      From there are around 30.7M taxpayers in 2010-11

      Now, to occupy ~17,500 managers, I estimate 40% of the clerks time would be spent in unnecessary meetings or doing pointless admin tasks resulting in only 21M PAYE forms being processed each year.

      So, to get 30.7M PAYE forms processed, we would need around 103,000 clerks, 26,000 managers and a payroll cost of £3.2B.

      Alternatively, the UK could simplfy the tax system.

      1. Anonymous Coward

        Re: Re: 1.4 billion (aka pointless mathes)

        £3.2 Billion?

        A bargain indeed.

        There were 2 errors there

        1.4 bil under paid and 3 bil overpaid making an error of 4.2 bil in total.

        What will be the cost of correcting the 3 bil overpayments?

        To avoid this again 70K clerks + associated management seems cheap.

        Alternatively just sack the whole bloody useless lot.

  4. The Original Ash

    It gets better

    The Powers That be have boned NI too.

  5. Anonymous Coward

    HMRC Have NO Idea What's Going On

    I called and asked what tax records they have for my PAYE over the last 4 years. They've only got records for ONE of those tax years. "Could you please send us your P60s?" they asked. For real?

  6. David 163

    Not in real time

    The big problem with the HMRC (apart from their general lack of ability to do simple math) is they have no idea what is happening with an employee until the end of the tax year once they receive a P14.

    They then issue coding notices based on this new information which may be out of date.

    This is due to change in the next few years as they are looking to move to a monthly return from the employers. This should allow them to keep accurate records and allow them to react better to changes in circumstances. (again allowing for their inability to do simple math and loose electronic data in an automated system)

  7. Refugee from Windows


    Considering that 95% of the work is done by employers, and all they occasionally do (not seen for 6 years) is send out coding notices, they seem to be on "Planet Public Sector" where nobody gives a dingo's kidneys about delivering a service. They used to send out coding notices two at a time, one for last year and one for next, then nothing for 2 years, now they don't even bother.

  8. Mungo

    Its not a 1.4Billion f@ck-up

    The article states that the total loss to the government is £1.4 Billion (tax that they failed to collect) PLUS £3 Billion (tax they collected but should not have and now have to give back) which makes this years HMRC Lottery F@ckUp Jackpot a staggering £4.4Billion.

    I do hate it so when British Citizens completely underestimate the HMRC capacity to totally stuff something up and pass the cost onto us.

  9. Michael 77

    Simply bin IT!

    Income Tax is a silly form of taxation anyway. There, lets not beat about the bush. It's complicated, invasive and costly. Scrap it & put 5% on VAT, or whatever the % that would be needed to make up for the *net* shortfall.

    I'm not really all that keen on VAT (sales / purchase tax in disguise), but I am keen on anything that will cut some daftness & huge expense from the way we collect tax.

    1. Anonymous Coward
      Anonymous Coward

      Simplify tax system

      Unfortunately the split of taxes is required to hide the real tax rate.

      Take an 18K salary and compare to the amount spent on council tax, national insurance, income tax, vat on purchases etc.... then see how much real tax on your salary is being paid - rough guess is at least 50% likely more.

    2. PT

      Scrap it & put 5% on VAT?

      But.. but .. Wait! That's what they told us they were going to do in the beginning, when VAT was first introduced! "It's 8% now", they said, "and when we phase out the income tax it may rise to 15%, but we'll all be better off because VAT can't be avoided and it's so efficient!".

      Never mind that the last statement turned out to be complete bollocks. If they get a second bite at that cherry, I predict that VAT will go up to 30% in one jump, but the "phasing out" of income tax will begin and end with lowering the rate by 3% in the first year and creeping it back up to current levels later.

  10. Sam Liddicott

    Too complicated even for them!

    At last - they must now admit that the tax system is even too complicated for it's perpetrators to get right.

    We already had the admission that "standard expenses reclaim procedures" are too hard for MP's to get right.

    An 38degrees only want to campaign on the fact that the chancellor uses an accountant to calculate his tax bill. In their eyes "making sure you follow the rules" is tax dodging.

    The real problem is a tax system where you really need an accountant before you can tell if you've paid all your tax.

    Ditch income tax and go for VAT.

    Just think how much more productive the country will be when all the self employed people can get back down to providing services and goods instead of calculating tax.

  11. Anonymous Coward


    TShYhe CIO was interviewed as perm and then hired as a contractor.

    So, was he inside or outside of IR35?

  12. Anonymous Coward

    Tax Code = Random Number Generator

    For the last two years, my accountant has accurately filed the information online with HMRC.

    HMRC then manages to randomly generate a tax code that has no baring on the information they have been given.

    Due to the expenses cycle at my company, the company usually owes me money, but one of the problems is that HMRC seems to turn this into a "benefit", which is a reversal of the number they have been given!

  13. Oliver 7

    Isn't it time for...

    Dave Hartnett, HM Revenue and Customs permanent secretary who's paid £160,000pa and whose expenses for the last three years topped £26,000 to be run out of the civil service on a rail? At least the bankers who lost billions all had to go, at least Tony Hayward eventually accepted that he had to step aside at BP.

    While we're on the subject Dame Lesley Strathie, Chief Executive, should be shown the door too. Only problem is that the door at the civil service is a revolving one!

  14. Anonymous Coward
    Anonymous Coward

    @Tax Code = Random Number Generator

    Pretty much it seems.

    For several years IR would write to me to say "you tax affairs look the same each year so we can work it all out for you and you don't need to send in a return" ... however, when I still go through the process of filling in a return in TaxCalc and submitting it I get a £500+ tax refund each year despite no significant changes to what I can claim

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