HMRC urged to improve understanding of online tax return costs

News Article - 17 November 2011
Category: Business

The National Audit Office (NAO) is calling on HM Revenue & Customs (HMRC) to improve its overall understanding of costs and the benefits of filing online tax returns for businesses.

Four years ago the taxman introduced online filing for self-assessment tax submissions, while this year HMRC required all corporate tax returns to be filed using the new online tax technology, iXBRL.

The NAO believes that although the new online filing requirements have been a genuine success, the taxman is unable to demonstrate the full benefits of online filing.

Amyas Morse, head of the NAO, said: "HMRC's expansion of online filing has been a real achievement. The programme is largely complete, on time and budget and more than 11 million customers are filing online.

"It is an integral part of the department's drive to increase efficiency. [However] HMRC cannot demonstrate that the benefits are being maximised. Significant improvement is needed in its understanding of costs and benefits to inform future development."

The NAO report indicates online tax filing has saved the taxman around £126 million so far, however last month MPs called on HMRC to "always ensure it has robust, well-advertised alternatives in place for those who cannot submit online".

John Whiting, tax director at the Chartered Institute of Taxation (CIoT) is concerned that a lack of broadband facilities and, in some cases, physical disabilities means some small businesses are out of the online loop.

Mr Whiting added there is a lack of "real acceptance of the fact that there are small businesses (and of course individuals) who really will struggle to file electronically".

Small and medium-sized enterprises with the capability and competency to manage their financials and accounting online may also consider business accounting software with the ability to store a lifetime of transactions and present and analyse data across an entire organisation.

Article keywords: nao, national audit office, hm revenue & customs

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