A unit of the HMRC has been ordered to revamp its financial management after a manager who, claiming that over £10,000 spent on work credit cards was used to pay an informant, was sacked by the taxman but avoids any criminal proceedings, following an Independent Police Complaints Commission (IPCC) investigation.

In July 2011, HMRC became suspicious when a number of credit cards that - as a team leader, the unnamed woman had access to - were found to have a combined bill of £10,530 over a 12 month period.

When questioned on certain transactions, the manager explained the money had been largely spent on intelligence sources with some also going towards the unit's petty cash float.

The woman was suspended on 3 August last year and the case was referred to the IPCC, who found the manager's explanation 'inherently implausible' and determined that it was 'more likely than not' that she had taken the money for her own use.

HMRC's head of internal governance Steve Timewell, said: 'We referred this case to the IPCC because we require the highest professional standards from our people. We take firm action on the rare occasions an officer's conduct falls below the standards we expect, and referring such cases to the IPCC ensures robust independent scrutiny.'A subsequent referral to the Crown Prosecution Service decided against charging the woman, though at a later internal HMRC disciplinary hearing, she was dismissed.

IPCC commissioner Sarah Green said: 'Public servants have a responsibility to ensure that the resources they are entrusted with are used responsibly. What our investigators found in this case fell below the standards expected.'

During their investigation, the IPCC did raise serious concerns over the credit card procedures followed by the taxman, including the ease at which one could be used for non-operational reasons over a 12-month period without being detected and the lack of a clear audit process for petty cash spending within the unit.

HMRC has since changed its credit cards system, reviewed its operating procedures and carried out a full audit of all transactions, with no further anomalies found.