Online Tax Returns Up In The UK- But Only Just

by Caroline Maxwell, Tax-News.com, London

12 October 2001

Having spent millions on setting up and advertising the online filing procedure for higher rate and self-employed taxpayers, the UK Inland Revenue has announced that the number of people filing online is up on last year - but only just.

The system has been dogged by critics from the start, and as far back as August this year was dubbed an expensive failure by many. A report at the time revealed that each return filed over the net had cost £320 to administer, a revelation which provoked angry responses from some opposition MPs. Matthew Taylor, a Liberal Democrat MP observed at the time: 'Spending millions of pounds on a system that hardly anyone is using is hardly a good use of government money. Many people will pay less in tax than it will have cost the government to process their tax return.'

Unabashed, the Inland Revenue continued to spend money hand over fist on advertising the service, enlisting the help of the 'Father Ted' actress Pauline McLynn, whose catchphrase 'Go on, go on, go online,' brought tears to the eyes of UK television viewers after prolonged exposure. Not tears of laughter, either.

However, despite frenzied spending and promotion, online filing in the UK just doesn't seem to have caught on in the way that the Inland Revenue had hoped, although there has been a marginal improvement in take-up. Between April and September 2001, it was revealed that just 41,395 taxpayers filed returns online, but this was an improvement on the same period of the previous year, when only 23,848 took advantage of the service.

Revenue spokesman, Aidan Close, said earlier this week that the IR is pleased with the progress being made: 'We're very pleased with the returns so far considering this is only the second year of our online system,' he explained. 'The figure at the halfway point in the year for tax returns due on 31 January 2002, already surpasses last year's overall figure.' He added: 'We haven't set specific targets for the amount of online returns we expect. But there's usually a last minute rush in the final ten days of January.'

However, tax experts and accounting industry groups aren't convinced that the overall number of returns justifies the time, effort, and money expended by the Inland Revenue. Interviewed in the Evening Standard this week, Chas Roy-Chowdhury, the head of taxation at the Association of Chartered Certified Accountants, outlined the extent of the problem: 'The returns so far this year form just 0.5% of the total number of self-assessment tax forms expected,' he revealed. 'Even if there is a last minute rush of online returns and the figure's doubled, we're still looking at a small figure- just 1%'.

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