HMRC criticised over EDS deal. By Dan Martin

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A multi-million pound compensation deal agreed between HM Revenue & Customs (HMRC) and computer firm EDS could unjustly influence how future government contracts are awarded, MPs have warned.

The comments came during a meeting of the Treasury select committee in which HMRC chairman Sir David Varney was questioned over the deal.

The compensation was imposed following failures of the tax credits system set up by EDS. It was arranged so that 24 million of the 71 million payment was dependent on the computer company securing future government contracts.

Critics however claim that other businesses attempting to secure public sector IT deals will now not be on a level playing field because EDS will be favoured so that HMRC can recover the full compensation.

During yesterday's sub-committee hearing,...

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20th Apr 2006 15:11

what a cracker
and it gets better. An article in Computer Weekly identifies the possibility that the amount of the compensation agreed was after taking into account the tax saved from the compensation charge in their accounts.

And of course it is all predicated apparently on EDS receiving a certain value of future contracts! If they don't, and the compensation payments thus do not reach the agreed level, then apparently HMRC might reconsider taking legal action against EDS.

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