25 November 2005
The Revenue & Customs Department has reached an out-of-court settlement with its former tax credits IT supplier, EDS.
The US-based firm will pay R&C £71.25m in compensation for the problems that followed the launch of the tax credits scheme.
Thousands of families were overpaid, in the first year of operation by £2bn.
The deal avoids a potentially costly court action. 'We were determined to reach a fair settlement for the taxpayer,' said R&C chief David Varney.
Doug Hoover, EDS's managing director for the UK, said: 'The government remains an important client for EDS and we are pleased that we have been able to settle this dispute.'
PFnov2005
