UK trials online tax payments

The Inland Revenue will collect its first income tax payments over the internet before the end of the year.

Accountancy Age has learned that the Revenue is looking into the best method of receiving payments electronically through a feasibility study that is already underway and will continue for the coming months.

No firm launch date for a pilot scheme for direct web payment facilities has been confirmed, but Revenue officials want the system in place as soon as possible.

The revelation comes just days after the Revenue announced details of the £10 tax discounts – revealed in Accountancy Age in December – for taxpayers who both file their returns over the web and pay electronically. This e-filing scheme, which Chancellor Gordon Brown will highlight in the Budget later this month, takes effect in April.

These electronic payment methods only include direct debit payments and automated banking systems, however. They avoid the issue of direct and paperless internet payments as well as the controversial issue of security.

But a Revenue official said ongoing pilots of web payments would be extended to taxpayers later this year. One method already at an early pilot stage would allow taxpayers to set up a bank account with an internet bank and would include a facility for outstanding tax to be paid directly.

“Our business management services division is working on a series of direct payment plans utilising the bank account method,” said a Revenue official. “We are running this method as an experiment and if it proves successful it will be extended.”

The Revenue added that from April 2001 small businesses that file their VAT returns or PAYE will have to be made by using methods such as direct debit.

The decision by the Revenue follows the Irish government last week which revealed that it will start collecting business and individuals taxes over the internet from September – in what it called “the world’s most ambitious national electronic revenue collection project”.

The system will also allow taxpayers to view an up-to-date statement of their account at any time over the internet, while the Irish government said half of its “customers” would pay tax electronically by 2005.

Officials plan to consult with representatives including the Taxpayer Service Delivery Sub-Group of the joint of the joint Revenue and Customs Electronic Commerce Consultation Forum.

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