The Debate – The Revenue’s online tax service

Room for improvement

By Chas Roy-Chowdhury

There is still much room for improvement of the system for online filing of self-assessment tax returns. Following the success of ACCA’s campaign to extend the deadline for this form of filing, we now call on the Inland Revenue to encourage wider take-up of the self-assessment internet service by enabling those with more complex tax affairs to file online.

As a result of ‘teething problems’ earlier this year with the Revenue’s internet filing service, the deadline for online filing was extended from 30 September to 30 December. This extension applies to those who pay less than £2,000 in additional income tax under self-assessment and are otherwise employees.

But despite extensive advertising campaigns, less than 2% of taxpayers have so far filed online and ACCA believes that more people would use the internet service if it accepted all categories of returns.

Unfortunately, the online service is currently limited to the filing of relatively straightforward tax returns. If it were extended to calculate the tax bills of more complex arrangements it would make online filing an option for thousands more taxpayers.

Given the upward trend in conducting financial matters online, reflected for example in the increasing use of internet banking, it is essential most people are given the opportunity to file tax returns online.

Although the extended deadline should encourage more people to file their tax returns online, the Revenue should also consider adding another incentive, in the form of a guarantee that all queries on the tax affairs of online filers will be resolved within 12 months of filing.

If this and further incentives for e-filing were to be introduced, Father Ted’s Mrs Doyle might find many more taxpayers choose to ‘go on’ and file their self-assessment tax returns online. Success depends ultimately on the Inland Revenue providing a reliable, good quality self-assessment internet service. –

  • Chas Roy-Chowdhury, head of taxation at ACCA.

Put the champagne on ice
By Michelle Perry

The Inland Revenue must have spent much of this month rejoicing when news emerged that online self-assessment tax returns filed for 2001/2002 burst through the 100,000 mark after just eight months – way ahead of 2000/2001’s full-year total of 71,304.

It could for a short while finally walk with its head held high after numerous delays, security breaches and technical glitches. All of which critics have relished.

Latest figures show online self-assessment is virtually doubling in popularity every year.

More returns are arriving every day and with the new three-month extension to 30 December 2002 the Revenue can expect to further boost electronic self-assessment at the expense of pen and paper form-filling.

At the time of the announcement, a Revenue spokesman cautiously said: ‘It’s too early to predict full-year figures but we’re very pleased.’

So, now that the initial rejoicing is over we can reflect on whether the Revenue should be celebrating about it at all. The Revenue has a policy of not setting targets for online self-assessment, so the public cannot gauge whether or not the system is successful or cost-effective. Worse still, the Revenue’s success was last week cut short as it suffered a further embarrassment when its site claimed that it is unable to cope with demand.

A posting on the site said: ‘Due to an unprecedented increase in the number of customers wanting to use (self-assessment) online, at certain times some are currently unable to gain access. If you meet this problem, please try to avoid accessing SA Online between 19:00 and 23:00 in the evenings.’

Those that file via the internet still represent a tiny percentage of the total figure. There are an estimated nine million self-assessment returns filed each year.

Credit where credit’s due, but if the Revenue wants all self-assessment filers to submit their forms electronically they will firstly have to sort out the variety of problems they consistently suffer.

The Revenue still has an extremely long path to tread if it wants to achieve its targets and make life easier for the public and itself.

  • Michelle Perry is features editor on Accountancy Age.

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