TaxPersonal TaxAccountancy Age exclusive: Millennium bug hits 900,000 taxpayers

Accountancy Age exclusive: Millennium bug hits 900,000 taxpayers

The Millennium Bug related problem has caused the Inland Revenue's computer system to fail - causing delays and uncertainties for around 900,000 self-assessment taxpayers.

Embarrassed Revenue officials confirmed to Accountancy Age this week that the computers would not work again until mid-June at the earliest.

The confession emerged as the Revenue admitted it was unable to guarantee its e-filing software against errors with the taxpayer ultimately responsible for their own tax affairs.

Technical glitches related to the Revenue’s recently installed millennium compliant software means it is unable to process 1999/2000 self-assessment tax returns.

Revenue offices are set to be flooded with returns from taxpayers sending back their returns before the 30 September deadline, a submission date taxpayers have to meet if the Revenue is to calculate the tax they owe.

A Revenue spokeswoman said only self-assessment returns would be affected. And she added: ‘Every year we upgrade our systems with new software packages. But because of Y2K implications the upgrade has taken us longer to finish due to technical difficulties.

‘We will have a backlog but network offices can carry out other work and tax payers will not notice any problems.’Despite the backlog, the Revenue insisted urgent repayment claims would continue to be processed.

The faulty software was developed by US computer giant EDS and workers from the provider are attempting to solve the technicalities.

Peter Horsman, national tax partner at Saffery Champness, said: ‘This means that taxpayers have no guarantee that they will not be subject to additional demands for tax, interest, surcharges and penalties as a result of using the Revenue’s e-filing system.’

A Revenue spokesman said this week that the department would not assume responsibility for errors caused by the new e-filing scheme, set to start in the new year.

But he said the Revenue was planning to undertake testing of commercial products to ensure data could be accepted in a suitable format.

‘Should anything go wrong, just as individuals using an accountant to file their tax return are not relieved of the individual responsibility of getting their tax returns correct. Neither are people using commercial software,’ the spokesman said.

But Horsman added that in his experience of using tax software, errors and glitches do occur.

‘Computers and software are far from error-free and responsibility has to be taken,’ he said.

The Revenue spokesman added that no-one would be penalised for making honest mistakes.

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