Paul Gray, chairman of HM Revenue and Customs (HMRC) has resigned today following a "substantial operational failure".
It is understood Gray is referring to the alleged loss by HMRC of computer discs containing the confidential details of around 15 million child benefit recipients.
Chancellor Alistair Darling is set to make a House of Commons announcement this afternoon concerning the reasons for Gray’s exit.
In a letter to HMRC staff, Gray says: “I am announcing today that I will be standing down as HMRC chairman as a result of a substantial operational failure in the department.
“This is not the way I would have planned to organise my departure from HMRC. I had hoped to be around for a while longer, and to have had the continuing privilege of leading HMRC towards the vision we have been developing.
“But I am extremely proud of what all of you in the organisation have achieved during my time as deputy chairman and chairman.
Our record – for example in achieving sustained increases in tax receipts, in steadily improving the operations of the tax credit system, and in playing our full part in protecting the border - is a good one.
“At the same time we have made important steps in restructuring the department to face our future challenges, delivering more with reduced resources.
“I know we still face some major issues where we need to do better. But I am confident the forthcoming Capability Review report will highlight some major strengths in HMRC, while giving us helpful steers on how we can improve further.”
Mr Darling is expected to outline the measures taken to protect those whose data has been lost.
The resignation of Mr Gray was accepted because discs had been transported in breach of rules governing data protection.
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