HM Revenue & Customs has been told that it needs to improve the reliability of its online filing infrastructure and market the benefits of online filing more aggressively if it is to increase the number of advisers who choose electronic filing over paper-based returns.

In a special report conducted for HMRC, research house Opinion Leader Research found that there were still a number of advisers who refused to file tax returns electronically or were very reluctant to do so.

Concerns abound despite HMRC expecting another huge increase in self-assessment online filing up to 31 January 2007, with as many as three million electronic returns filed ahead of to the deadline.

The report found that many non-users were disinclined to switch to online filing because they were unconvinced about the benefits of doing so, while others believed that HMRC’s technology was not robust enough to handle returns accurately, especially during busy times.

‘You hear so many stories. The main story is that come January when you want to file online you try and do it over the weekend and you can’t do it, so that doesn’t really instil a great deal of confidence in the system,’ according to one adviser interviewed.

Another said it was not obvious that it would be any ‘quicker doing it online or any better’ than doing a paper-based return.

The report said that if HMRC was to increase the number of advisers filing online it would have to make a significant effort to raise awareness of the benefits of electronic filing and keep technical problems to a minimum.

‘HMRC needs to ensure its online filing systems are both customer friendly and effective (i.e. they work) to ensure more widespread adoption. The better the system is, the greater use [advisers] will make of it,’ the report said.

‘The reputation of the system is paramount to the success of online uptake. One major system fault could be taken as cast iron evidence by non-users that they were right to distrust online filing.’

The report said there were also a number of advisers who were very supportive of electronic filing and eager to file corporation tax returns, self-assessments and VAT returns online. It also found that many of the advisers opposed to electronic returns were from an older age group.