The Commons Public Accounts Committee has given HMRC a thorough kicking wrt the PAYE reconciliation issues of 2008/09, 2007/08 and earlier years.
Accountancy Age reports that the committee Chairman, Margaret Hodge, said that HMRC "failed in its duty to process PAYE accurately and on time" and deliberately left taxpayers in the dark until last September because of problems with its NI and PAYE Service (NPS) computer system.
"HMRC's mismanagement has caused uncertainty and worry to taxpayers and inequity in the system. We now look to the department to be able to demonstrate clearly by the end of 2011 that NPS can process PAYE promptly, accurately and efficiently. Taxpayer confidence must be restored."
The committee noted that the implementation of NPS was "flawed", and that there are "data quality issues" that had disrupted the issue of tax codes for 2010/11.
Seemingly HMRC began issuing 25 million coding notices for 2010/11, without first establishing why the number was massively in excess of its forecast.
As I have noted before, the root cause of HMRC's problems stems from the botched merger (ordered by Brown), the interference of politicians, the complexity of the tax system (legislated by politicians) and the ineptitude of senior managers (appointed by politicians).
The committee is right to draw attention to the problems, and is right to blame HMRC for specific issues. However, the underlying cause of HMRC's problems (and ultimately their resolution) lies in the hands of the politicians.
That of course means the problems will never be solved, as our political establishment simply isn't up to the job.
Tax does have to be taxing.
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