Tories slam mandatory online tax dealings

Link: NAO issues warning on online VAT service

Shadow Tory paymaster general Howard Flight insisted there must be a right of choice and it should be up to individuals and companies to decide whether they wanted to risk doing business online with no paper evidence to support them in a dispute.

Tory accountant MP Mark Hoban said he was ‘wary’ of the idea of compulsion following last year’s computer confidentiality issues, adding: ‘The government must demonstrate that their systems are robust and secure and therefore ensure that they have the credibility that will ensure people file electronically.’

And shadow Liberal Democrat chancellor Vince Cable said electronic government should be encouraged but the burden of doing so should not be placed on individual taxpayers.

Cable said an NAO suggestion that departments should do more to ‘incentivise’ e-filing sounded ‘sensible’ because it got away from the ‘Big Brother’ approach.

Customs said the Gershon Report had not yet been made available to them ‘so it is not able to formally comment’.

But a spokeswoman said Customs was ‘looking at all the options to encourage take up of electronic services as these are made available’.

Gershon – in a substantial apparent leak earlier this week – proposed that intermediaries such as accountants would be required to go electronic in their dealings with the Inland revenue and Customs and Excise.

At present this applies only to employers filing PAYE returns.

The intention would be to make it compulsory for those deemed ‘e-capable’ including businesses, young people, students and higher-rate taxpayers to use electronic filing where available, requiring income tax and VAT returns, application forms for grants and other official documents to be filed over the internet.

Those who were not ‘e-capable’ would be able to use telephone call centres and other contact centres.

Gershon is understood to point out that 19 million people now use online banking services without a qualm and that 75% of London congestion charge payments are made online as are 11% of tax credit applications.

His mandatory approach diverged from that of the National Audit Office in an earlier report, which urged departments to do more to ‘incentivise’ online transactions.

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