§ Earl Russell
asked Her Majesty's Government:
Whether it is correct, as reported in the Independent on 23rd May, that they are about to contract out tax records to a private company and, if so, whether taxpayers are bound to consent to allow a private company access to their confidential affairs and, if so, by what authority.
§ The Parliamentary Under-Secretary of State, Department of Employment (Lord Henley)
On 23 May 1994 the Inland Revenue signed contracts with Electronic Data Systems (EDS) for the supply of information technology services to the department over the next 10 years. Among the services which EDS will provide is the operation of computer systems which support the work of Inland Revenue employees in local tax offices.
The courts have recognised that the Commissioners of Inland Revenue, who are charged by statute with the care and management of the inland revenue, exercise a wide managerial discretion in the fulfilment of their functions. The Commissioners do not require the express consent of individual taxpayers in order to enage private sector assistance in carrying out their duties (whether or not those duties were previously undertaken by civil servants).
Under Section 182 of the Finance Act 1989, legal sanctions (a fine, or imprisonment, or both) apply, on conviction, to those who disclose confidential tax information without authority. This applies to private contractors engaged by the Commissioners of Inland Revenue, as well as to the Inland Revenue employees.