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Survey Shows Lack Of Trust In HMRC's E-Filing System

by Robert Lee, Tax-News.com, London

02 January 2007


A fear of a systems failure in the HM Revenue and Customs' electronic system is deterring accounting professionals from taking advantage of e-filing, according to a recent survey.

The survey from 1,000 members of the UK accounting bodies including the Institute of Chartered Accountants in England & Wales (ICAEW) also revealed that this lack of confidence is currently deterring agents from recommending clients using the system to pay their taxes online.

The survey found that despite widespread support for e-filing, there are significant concerns about HMRC’s track record for delivering reliable, robust systems with sufficient capacity to perform adequately at peak times.

Over half (54%) of the respondents already filed more than 75% of income tax returns electronically, highlighting the popularity of the scheme, yet revealing the extent to which it is underused.

The ICAEW said that with a number of recent high profile systems failures it is not surprising that there is a lack of trust in the electronic system.

Members of the accounting bodies believed that HMRC-approved substitute returns will still be needed despite proposals that they be withdrawn in 2008, mainly due to agents needing a fallback in the event of an HMRC systems failure.

In addition, this fear of a systems failure close to the filing deadline was the main thing members found problematic about electronic filing (39 per cent).

The ICAEW believes the performance of the Self-Assessment system in the run up to the 31 January 2007 deadline and of the PAYE system in the run up to 19 May 2007 will be critical in terms of building confidence.

Paul Aplin, deputy chairman of the ICAEW Tax Faculty, said:

“The survey highlights a number of things HMRC can do immediately to build confidence and drive take up. We also believe that HMRC are missing a potential big win by not producing an electronic version of the R40 repayment claim form. We raised this in our representation to the Carter Review last year but it was not taken up.”

Following HMRC’s announcement that electronic attachment of additional information will now be allowed following lobbying by the accounting bodies, over half (54%) believed that they would send an attachment of less than 1Mb and 41% believed the information sent would be between 1Mb to 5Mb.

In addition most (82%) primarily use third party software to complete the returns whilst only 18% rely on HMRC’s free online software.

TAGS: tax | accounting | professionals

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