Home >> Tax News >> Tax Fraud to be tackled by HMRC and DWP
Added 09 August 2011
The central data hub will be used to gather and analyse benefit payments, in the hope of reducing Tax Fraud and errors occurring in the system.
HMRC and DWP expect the Iris to improve cost savings for the government, debt recovery and to fuel the application and performance of universal credit.
The Universal Credit system currently has a completion date set for 2013.
This is an intricate Information Technology (IT) system that will possess the ability to combine personal data from both HMRC and DWP; making the benefits system more straightforward.
The Department of Work and Pensions have published a tender document in the Official Journal of the European Union, in order to gain a framework agreement for the terms of data services to be used in the centralised hub.
“It is expected that DWP will save £370m once the framework has been set up. However, the framework will also have the potential to create additional savings depending on how many other government departments make use of it once it is in place,” a spokesman for DWP said.
DWP and the Revenue will be looking to get a data services provider on board who can provide data to be used by the department in the effort to reduce tax fraud and errors.
It is estimated that the contract will be drawn out for 4 years at the cost of up to £45m.
A spokesman for DWP added it hopes to announce the award of a contract early next year (2012).
Kevin Kinsella Jnr, of KinsellaTax, says:
“If HMRC and DWP are able to properly validate an individuals’ personal data, they could potentially save £1bn per year.
“With the development of universal credits and real time information, tax fraud and benefit error reduction looks set to be an ongoing battle for both departments.”
According to DWP’s tender document, any increase in savings – due to implementation of the Universal Credit system – will “support the government’s spending review commitments”.
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