Loopholes within the governmental machinery are allegedly held responsible for the loss of two CDs containing sensitive information of 25 million people, which is about half the population of the UK.
The CDs containing significant information including- names, addresses, national insurance numbers, and bank details of child-benefit claimants, went missing in November 2007.
Independent Police Complaints Commission (IPCC) has stated that the data handling in HMRC is “woefully inadequate” and that the officials have assumed a “muddle through” culture in dealing with personal records.
In another report, Kieran Poynter, Chairman Pricewaterhouse Coopers, has maintained that the loss of the CDs was “entirely avoidable” and also questioned the governance and accountability of HMRC.
Citing the institutional deficiencies in HMRC data handling, IPCC commissioner Gary Garland said: “An event like this was certain to happen- the only question being when”.
In a speech to parliament, Chancellor Alistair Darling has accepted that the incident was avoidable and stated that the other issues mentioned in Poynter's review have been addressed.