EDS' US$121.8 million settlement

Electronic Data Systems (EDS) and HM Revenue & Customs (HMRC), have negotiated a settlement of HMRC's claim for compensation for problems experienced with the IT system developed by EDS, to support the 2003 launch and subsequent operation of Tax Credits, during EDS's partnership with HMRC.

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By  Angela Sutherland Published  November 28, 2005

Electronic Data Systems (EDS) and HM Revenue & Customs (HMRC), have negotiated a settlement of HMRC's claim for compensation for problems experienced with the IT system developed by EDS, to support the 2003 launch and subsequent operation of Tax Credits, during EDS's partnership with HMRC. HMRC and EDS have successfully concluded an aggregate settlement of US$121.8 million including an up-front payment and payments of additional amounts over time, accoridng to HMRC. The firm believes this will be commensurate with EDS's responsibility for the IT problems which followed the launch of Tax Credits. The specific terms of the settlement agreement are confidential. "We have achieved a settlement of this complex dispute with EDS agreeing to pay compensation. The Tax Credits IT problems had an adverse impact on many Tax Credits claimants,” says HMRC chairman, David Varney. “We were determined to reach a fair settlement for the taxpayer, and I believe that has now been achieved," he adds. Doug Hoover, EDS managing director for the UK, Ireland and Africa states: “We were always focused on reaching an equitable settlement. HM Government remains a very important client for EDS and we are pleased that we have been able to settle this dispute without incurring the costs and uncertainties of what would have been a lengthy and complex legal case.” EDS provided IT services to the Inland Revenue under an outsourcing contract from 1994 to 2004.

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