HMRC's Wonky Databases

HM Revenue & Customs (HMRC) has been having some problems with its databases.

No, I don't mean that embarrassing "little" incident last year when it lost the data records of 25M people.

Seemingly it has incorrectly taxed up to five million UK citizens.

A report by the National Audit Office (NAO) found that up to £880M in pay as you earn (Paye) taxes had not been collected each year, while other taxpayers had overpaid by up to £340M.

The NAO said in its report that IT systems were "not well suited to the efficient administration of income tax where people have more than one job or change jobs on a regular basis".

It added:

"These difficulties have been compounded by inconsistent working practices within the department as a consequence of staff not being aware of or failing to follow departmental procedures."

The NAO said problems stemmed from tax records being structured around jobs, rather than around taxpayers.

HMRC have admitted that its Paye systems have difficulty coping with people who have more than job. However, it has promised to fix the problem.

So that's alright then?

Errrmmmm...maybe not.

For you see, the solution that HMRC intend to implement is to move its processing from its 12 regional databases onto one single national database during 2008-09.

An HMRC spokesman said:

"This will bring together separate employments into a single customer record to create a single view of employees' tax affairs.

Our staff will have access to all of an employee's pay, tax, national insurance and pension information which will be all in one place. This will make our Paye processing quicker and more accurate."

A noble idea.

However, given their previous problems wrt merging/rationalising departments and the complete inability of any government orifice to handle IT issues in a professional and successful manner, does anyone seriously believe that the merging of 12 regional databases will work?

I guarnatee more records will be lost and muddled up during 2008/09.

Tax does have to be taxing.

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