Flak for Brown over taxman foul-ups

GORDON Brown will face criticism from a powerful Commons committee today over the 'shambles' that has engulfed the Inland Revenue.

The Treasury Select Committee will expose serious failings in the management of the tax-collecting agency.

A string of scandals has left the Inland Revenue's reputation at rock bottom. They include chaos in the payment of child tax credits and a massive failure in the collection of National Insurance, which has left millions facing a pension shortfall.

The Inland Revenue's poor record will be laid firmly at the Chancellor's door because it is part of his Treasury empire. Having been in the post for six years, Brown will not be able to blame the failure on previous governments.

The Chancellor has already tried to pre-empt the committee's damning verdict by launching a major review of the Revenue and the Customs and Excise, which could see the two agencies merging into a single Tax Ministry. Hehas been stung by charges that he has lost control of the Inland Revenue.

In May, it was revealed that the agency had failed for five years to issue reminders to people who were not paying enough National Insurance contributions towards their state pension.

The Revenue's chairman, Sir Nicholas Montagu, has acknowledged a breakdown of communication between the Treasury and the agency, saying that the 'left hand didn't know what the right hand was doing'. As a result of the failure to send reminders - also known as deficiency notices - one third of workers are to be told over the next year that they must pay up to £1,500 to safeguard their right to the minimum pension of £77.45 a week. The blunder will be highlighted in today's report by the Labour- dominated select committee.

The MPs will also focus on the system of administering the new child tax credit, which has descended into chaos, with many payments overdue and a Government helpline jammed with calls from worried parents.

The Revenue has also been criticised for selling its property holdings to Mapeley STEPS. The contractor is based in the tax haven of Bermuda yet the Chancellor has repeatedly used his Budget statements to introduce measures aimed at curbing the use of off- shore tax havens.

Tory work and pensions spokesman David Willetts said: 'The performance of the Inland Revenue over the past year has been an absolute shambles. I hope the committee has got to the bottom of what went wrong. The ultimate responsibility lies with Gordon Brown who will never make anything simple if he can make it complicated instead.'

Brown hopes the review he launched earlier this month will draw the sting of today's report. The review will demand a 'new framework for accountability for those working on tax, to set out more clearly the roles and responsibilities of all those involved', the Treasury said when it was launched. 'Greater clarity will provide better certainty both for officials and ministers.' The Permanent Secretary to the Treasury, Gus O'Donnell, is chairing the review, which will report to Brown and other Treasury ministers.