Gates boosts online tax offering

Microsoft is poised to target the personal self-assessment market as it deepens its partnership with the Inland Revenue over the online filing of tax returns.

Although Microsoft already offers Microsoft Money for personal and business finance, it lacks a product for the tax market. TaxSaver99 will see Microsoft go head-to-head with niche tax specialists such as Which and Intuit, and could provide a springboard into the corporate tax market. In October, Microsoft plans to launch Money 2000.

Microsoft refused to reveal which software vendor had written the code for TaxServer but Digita, a personal tax software specialist, is thought to be the front-runner. Digita has worked closely with Microsoft on developing Money 98 and 99 and is the only tax supplier to boast Microsoft accreditation.

Since the introduction of personal self-assessment two years ago, the Revenue has been committed to increasing the number of tax returns handled through its electronic lodgment system (ELS). The take-up for ELS has been modest to date, but the Revenue aims to handle tax returns via the Internet by 2005. Microsoft is one of the government’s main industry partners in this initiative.

Only authorised tax agents, not individuals, are currently allowed to file their tax returns electronically, using a PC, modem and Revenue software.

One tax expert, after seeing a prototype version of Money 2000, said TaxSaver99 and Money 2000 were designed to capitalise on ELS. ‘Unlike the niche professional tax market, there is big money to be made with eight million individuals filing electronically,’ he said. ‘Microsoft is going for the man in the street.’

Gareth Arnold, Microsoft’s international product planner for the desktop division, said that TaxSaver99 was a logical progression for Microsoft, building on its personal finance products.

‘We’re heavily into the personal finance market, and online self-assessment returns are a natural extension of this,’ he said.

Arnold added that niche tax software providers had nothing to fear from Microsoft’s entry into the market. ‘It’s very early days to talk about dominating the market,’ he said.

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