NAO: HMRC can’t illustrate benefits of online filing

HM REVENUE & CUSTOMS needs to improve its understanding of costs and benefits of filing online tax returns, the National Audit Office (NAO) has said.

Earlier this year, HMRC required all corporate tax returns to be filed in a new online tax technology, iXBRL. Four years ago, the taxman also introduced internet-based filing for self-assessment submissions.

Head of the NAO Amyas Morse, said: "HMRC's expansion of online filing has been a real achievement. The programme is largely complete, on time and budget and more than 11 million customers are filing online. It is an integral part of the department's drive to increase efficiency."

However, although the NAO acknowledges the roll-out of the new filing requirements was an achievement, it believes HMRC is still failing to recognise the benefits of online filing.

"HMRC cannot demonstrate that the benefits are being maximised. Significant improvement is needed in its understanding of costs and benefits to inform future development."

The NAO report revealed 11.5m customers had submitted one or more tax returns online, including VAT, corporation tax and self-assessment. The office estimates HMRC has saved about £126m so far.