EDS has agreed to pay £71.25 million (NZ$177 million) to the British government’s tax agency after trouble with an IT system that tracked tax credits.
The agreement terminates a claim from HM Revenue and Customs (HMRC). The specific terms of the agreement were not announced, but the settlement includes an upfront payment from EDS and additional payments over time.
HMRC had sought compensation related to IT problems with the Child Tax Credit and Working Tax Credits system implemented in April 2003. Through 2004, some £16 billion in tax credits were awarded to 5.7 million families, but as many as one third of those recipients were overpaid by between 10% and 14% that year, according to a UK government report.