EDS warns of tax delays in £3bn Revenue IT handover

EDS claims vital tax credit payments could be delayed by the handover of the Inland Revenue's IT systems to Cap Gemini Ernst & Young (CGEY).

CGEY last week sent shockwaves through the IT industry by beating incumbent EDS to win the 10-year £3bn Aspire contract to run the Revenue's IT.

EDS came under increasingly high profile and vitriolic criticism from MPs in the run-up to the contract award over its botched handling of the introduction of the tax credit system. Yet it was still a massive decision for the Revenue to opt for a new supplier and all the handover issues that will entail.

EDS' warning about possible problems with tax credit payments came in a thinly-veiled threat contained in a statement issued after the contract announcement. The statement said the firm is "extremely disappointed" not to have been selected but still believes it offered the "best solution at the best value".

But one intriguing line said EDS' solution would have secured "uninterrupted flow of tax revenues and credits".

There was no hint that EDS would not co-operate on a smooth handover with CGEY and publicly EDS will not comment any further on the statement apart from a spokeswoman telling silicon.com the statement had been worded carefully and deliberately.

The Inland Revenue was not immediately available for comment.