System glitches and attempting to convince a sceptical public about the benefits of online filing have been major challenges for HM Revenue & Customs, but despite these hurdles chairman Paul Gray believes the taxman is making good progress and is eager to improve where necessary.

In a podcast released by HMRC, solemnly entitled ‘An honest assessment from HMRC’s chairman’, Gray says that although HMRC still has ‘a long way to go’ before its IT systems reach the standards he expects, the department has ‘come a very long way’.

‘I believe we have made a huge amount of progress over the last two to three years. Last year over five million PAYE returns were filed online and we have reached our target of 35% of our self-assessment customers filing their returns online a year early. We have come a very long way,’ Gray says.

The HMRC chief admits, however, that there are areas that need to be improved. He says the recent PAYE filing deadline has served up a number of lessons.

The PAYE process has received harsh criticism from advisers and taxpayers, who have complained that at some points the system was down for a week and that there were regular occasions when it was near impossible to access crucial P60 forms or important
client lists.

‘Sometimes our systems don’t give people the service they need. There were examples of conflicting advice coming from different local offices and we need to sort that out and be more consistent.

‘I think that our search and navigation facilities on our website still aren’t as good as they should be and we need to look to improve that, and the process for when there was a need for people to submit returns wasn’t as clear as it should have been,’ Gray says.

In response to Gray’s concerns and those raised by taxpayers, HMRC has undertaken a wide-ranging taxpayer feedback process and is preparing to introduce a package of measures to improve IT services within the department.

‘Our structured action request service for advisers is particularly important to them and they wish to see it improve so that they can change addresses and other details online. We are extending that online service next year. By 2009 we will be ready to offer online filing for returns from previous years,’ he says.

Gray promises that HMRC will continue to stay ‘focused on user needs’. Advisers and taxpayers will certainly be hoping that this is the case.