Radical improvements to HM Revenue and Customs' (HMRC) website including an online tax return facility have been demanded by the influential Commons Public Accounts Committee in a bid to cut £330m in annual revenue losses caused by taxpayer errors.

The committee also called for better information on the website and an expansion in online services, which it claimed could save a further £100m by reducing individual taxpayer contact.

Completing a tax form should be made much simpler, said Edward Leigh, chairman of the committee.

"Too many people are unintentionally making mistakes, resulting in an estimated underpayment of tax each year of some £330m," he said.

The committee said the number of forms which can be completed online should be increased and tax authorities should increase the use of email contact while retaining a high-quality telephone, post and face-to-face service for those unable or unwilling to use IT.

MPs said more of the 40 different personal tax forms should be available online with clear guides to completion.

Leigh also challenged HMRC to reveal how much extra revenue is received as a result of taxpayer errors.

A glitch on the final day of the tax return deadline earlier this year led to a one-day extension – despite this more than 3.5 million people filed online, an 80 per cent increase on last year.