British tax collection in Y2K jeopardy : LUSENET : TimeBomb 2000 (Y2000) : One Thread

From the BBC(London) Wednesday, February 10, 1999 Published at 16:44 GMT

Business: Your Money

No taxes in the new millennium?

The Revenue is facing a "tight schedule" to ensure year 2000 compliance

The millennium bug could disrupt tax collection in the UK if the Inland Revenue fails to keep a tight rein on its programme to fight the computer problem.

The public spending watchdog, the National Audit Office, said the Revenue needed to keep a close watch on its plans to make its computer systems Year 2000 compliant.

It warned that the timetable being worked to was tight, allowing little room for slippage.

The comments were made in a report on the 1997/98 accounts of the Revenue and Customs and Excise. Comptroller and Auditor General John Bourn said the Revenue needed "to ensure ... the momentum and monitor progress closely, particularly on key systems which are due to be replaced in their entirety in 1999, and on the replacement of local office equipment, since there is little room for slippage."

He said the Revenue was setting aside #16.5m to make the changes needed to the 149 computer systems which will remain in use beyond the end of the year.

Three major computer systems are also to be replaced and another upgrade programme will cover the organisation's 55,000 personal computers.

Outside firms involved

The Inland Revenue is also liaising with other organisations to reinforce the importance of ensuring that interfaces between systems are Year 2000 compliant.

It is talking to firms such as Crest, the electronic settlement system for UK corporate tax securities, which is used for the calculation and collection of most stamp duty reserve tax. Around #1.7bn of tax receipts was collected through it in 1997/98.

Tax collection is also dependent on some 1.2m employers who operate the pay-as-you-earn system, which was used to collect #114bn of income tax and national insurance in 1997/98.

The Inland Revenue intends to send publicity and instructions to employers to ensure that their systems operate properly come the New Year. It will make it clear that the usual interest and penalty rules will continue to apply in the event of any system failure.

Cut and pasted by

-- Old Git (, February 13, 1999


I reckon the last two paragraphs (about pay-as-you-earn) are the important ones. Something like 2/3 of our population never even see a tax return, the employer does it all for them. For all but the self- employed, tax returns supply corrective data to the broadly correct deductions that the revenue has already made to your income.

One other point; the UK tax return forms are designed for manual operation! You start by filling in all the facts, then follow a set of instructions like "add the contents of boxes B1, B3 and B17 and write the result in box B24"... and eventually get to a box containing a number which is the amount you owe them (or sometimes that they owe you).

At present, most folks supply the data and let the revenue do the sums, presumably by computer. But they could easily mandate manual completion by taxpayers. Is this prescience, or what?

-- Nigel Arnot (, February 15, 1999.

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