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Tax staff expose IT failures

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BBC Radio 4's Money Box
Saturday, 6 February 2010 at 1204 GMT On Radio 4 and Online

Millions of people could pay more tax than they should from April.

This week more problems have emerged with a new computer system which tells employers how much tax to deduct from our pay.

Her Majesty's Revenue & Customs has already admitted that many of the 25 million tax codes which are currently being sent out could be wrong.

But, this week, more glitches have come to light with the computer program that now produces them.

Revenue insiders have told Money Box that in some cases it is double-taxing the value of benefits like a car or health insurance provided by employers.

It has also emerged that married couples and civil partners aged 76 or more could lose an allowance worth nearly £700.

And more than half-a-million people, who started claiming their state pension this tax year, could automatically have too much tax deducted from their income next tax year.

The Revenue says it has recently fixed problems including those with state pensions and benefits in kind, but admits it is still working to resolve remaining issues.

Presenter Paul Lewis hears John Whiting from the Chartered Institute of Taxation.

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Arch cru fund range

Around 20,000 investors who put their money into a range of private finance and private equity funds face a three to five year wait to recover their trapped cash.

They were marketed by cru Investment Management, managed by Arch Financial Products, and sold to investors through Independent Financial Advisers.

Once valued at £243 million, the fund is now worth only £144 million, a fall of 40% in value.

The funds were suspended by the Financial Services Authority in March 2009.

Money Box has seen a 30-minute DVD used to market one of the funds. It was sent to Independent Financial Advisers to help them promote the fund and sums up the investment as 'low risk' and 'cautious'.

The programme hears from Citywire reporter Daniel Grote, who obtained the DVD; partner at the law firm Regulatory Legal, Gareth Fatchett; and John Maguire, chairman of cru Investment Management.

Read statements from Arch, Ernst & Young, and Capita.

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Anger at change to state pension rules

From April 6 the number of qualifying years needed to receive the full basic state pension becomes the same for men and women - 30 years.

The change is supposed to help women who tend to miss out on qualifying for the full state pension because they haven't paid enough National Insurance contributions. But it has created a pensions cliff edge of midnight between 5 and 6 April.

Women turning sixty or men turning sixty-five before midnight will have to have made up to 14 years worth of national insurance contributions more than those born in the next tax year.

We speak to Money Box listener Philip Risdon and Malcolm McLean from the Pensions Advisory Service.

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Debt concerns affect global stock markets

Global shares have fallen sharply this week as investor concerns about some European governments' debt levels continue to grow.

Indices in London, New York and Tokyo fell by more than 3% despite a surprise fall in the US unemployment rate.

A lack of demand for Portuguese government bonds reignited fears that countries such as Portugal and Greece may struggle to service their growing national deficits.

Money Box talks to Gillian Tett, an assistant editor at the Financial Times.

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BBC Radio 4's Money Box was broadcast on Saturday at 1204 GMT and repeated on Sunday at 2102 GMT.

Money Box



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