An outstanding debt of £26.5m is unlikely to be paid to HMRC by EDS, a Public Accounts Committee report published today said.

The IT company, charged with the responsibility of the tax credit system, was told in 2005 to pay £71.25m due to errors that occurred in its introduction in 2003.

According to MPs the department should take EDS to court if the remaining amount is not paid by the end of the year.

The contractor has paid very little of the remaining sum as it is dependent upon winning future work from the government.

Edward Leigh PAC chairman believes that 'if the full amount is not paid over by the end of 2008 then HMRC must be prepared to return to the courts'.

Further Reading:

MPs report says tax credit system a failure