David Jetuah, Accountancy Age, Wednesday 15 September 2010 at 12:40:00

HM Revenue & Customs chief executive Lesley Strathie vows that thedepartment is fit for purpose despite 2000 more staff to be axed from PAYEprocessing in the future

HMRC's top brass have been grilled by Treasury committee MPs in the wake ofthe PAYE blunder which affected six million taxpayers.

HMRC chief executive Dame Lesley Strathie, permanent secretary Dave Hartnettand personal tax chief Bernadette Kennedy faced tough questions from theTreasury committee.

MPs were concerned that in the wake of the problems, 2000 job cuts were inthe pipeline for HMRC staff handling PAYE processing.

Dame Lesley rejected accusations that HMRC was "dysfunctional", vowing thedepartment would be able to cope in the future as job cuts continue and thegovernment clamps down on spending.

After the PAYE coding errors, the taxman is to waive bills of 300 or less.

The concession will mean 900,000 taxpayers will be spared paying any moneyback, at a cost of 160m to the Exchequer.

However the taxman is still looking to collect 2bn after the PAYE errorswhich saw 6 million people pay the wrong amount of tax.

At the Treasury meeting, HMRC also confirmed that those who need extra timeto pay back-tax of more than 2,000 will not be charged interest.

Strathie added that taxpayers in financial hardship may be able to staggerrepayments over a two to three-year period.