Online filing involves different processes and systems compared to that in which a junior member of staff fails to keep a proper check on data discs. But advisers believe HM Revenue & Customs now faces a huge task in turning around the public’s perception of HMRC’s IT systems and processes.

‘The data loss has wider ramifications for UK taxpayers and businesses ­ with the advent of online tax filing the perceived security of such sensitive data will be at the forefront of everybody’s mind,’ said Andrew Hubbard, national tax technical director at Tenon.

‘There’s no reason to depart from online filing processes, as it’s safer than putting it in the post. HMRC has to get its reassurances out that this does not compromise online filing security,’ he added.

With the 31 January self-assessment deadline around the corner, the taxman must dispel fears that information sent online will fail to be robustly protected, or face the unusual situation of individuals going back to sending returns by post, conversely a less protected means of delivery than over the internet, or by hand. Hubbard believes the figure for uptake of online filing might suffer ‘a blip’ this year.

Grant Thornton senior tax partner Mike Warburton said the public feared that the disc loss was indicative of ‘a malaise’ at HMRC.

‘I hope it doesn’t affect online filing, but there are a lot of scared people out there.’
Advisers’ support of online filing will be a welcome boost to HMRC, which is pushing for all tax filing to be undertaken online, where advisers have driven the public’s uptake in recent years.

Online filing has proved popular in recent years as HMRC’s systems have proved to be robust.

Nearly three million self-assessment filings were made prior to the 31 January 2007 deadline, up 50% on a year earlier ­ advisers filed two million of those on behalf of clients.

Smith & Williamson national tax director Richard Mannion said that those planning to file online for the first time will think again ­ but, as far as firms were concerned, those that have previously filed on behalf of clients ‘would have had a reasonable experience’.
‘It won’t stop firms from filing online,’ said Mannion.