Tax and duties

e-Revenue

“Being at the forefront of the public sector’s drive to develop electronic services carries increased risks which need to be managed. Teething problems are to be expected, and need to be learned from quickly. The Inland Revenue has adopted a number of good practices from the private sector, including build and learn. An important message is that services must be demonstrably useful to the public if they are to use them on any scale, but it can take time to redesign existing processes particularly in an organisation as large and complex as the Inland Revenue.

“Many of the lessons learned by the Inland Revenue, and the good practices adopted, are equally applicable to other public bodies developing electronic services, and it is important to share these good practices as they develop.”

"Being at the forefront of the public sector’s drive to develop electronic services carries increased risks which need to be managed. Teething problems are to be expected, and need to be learned from quickly. The Inland Revenue has adopted a number of good practices from the private sector, including build and learn. An important message is that services must be demonstrably useful to the public if they are to use them on any scale, but it can take time to redesign existing processes particularly in an organisation as large and complex as the Inland Revenue.

"Many of the lessons learned by the Inland Revenue, and the good practices adopted, are equally applicable to other public bodies developing electronic services, and it is important to share these good practices as they develop."

Sir John, 14 February 2002


The development of the internet and ‘e’ services has opened new opportunities for public sector bodies to improve services, and the way they communicate with individuals and organisations, in innovative ways at potentially low cost.

The Inland Revenue is at the forefront of this drive to offer internet and other electronic services. Early developments have focused on providing ‘e’ services to core customer groups, in order to meet the Government’s target that 50 per cent of its services should be available electronically by 2002. To date, some 30 per cent of Inland Revenue services are available electronically.

According to today’s report from the National Audit Office, business interest in the Inland Revenue’s electronic data interchange facility for Pay As You Earn tax has been strong. 5,000 employers now use the service to send tax data to the Inland Revenue for some six million employees. However, take up of the service whereby taxpayers can submit Self Assessment returns over the internet had been less than expected. The reasons include teething problems with the software, public concerns about security in using the internet for any transaction, and that taxpayers perceive a lack of clear benefit in using the electronic service.

The benefits to both taxpayers and the Inland Revenue of its electronic services are potentially substantial. The Self Assessment internet service offers taxpayers an assurance that the return is arithmetically correct and faster processing of any tax refunds; and the Inland Revenue estimates that it saves £3 each time a taxpayer uses the service. Moreover, increased use by employers of the Pay As You Earn service would generate savings to the Revenue of some £20 million by 2004.

The report points out that the Inland Revenue is learning from its experiences with the Self Assessment internet service and has adopted a number of good practices from the private sector. Areas in which progress have been made include: addressing key risks fully, using a build and learn approach to development, solving potential problems promptly and marketing a service only when it is demonstrably fit for customers’ needs. The Inland Revenue is also taking steps to develop electronic services that offer further benefits to customers, but it will take time and resources to re-design existing services.

Sir John concludes that the Inland Revenue must build on the progress it has made to demonstrate to taxpayers the clear benefits to them of using its electronic services in the future. It must also develop a more customer-oriented approach. However, in the light of progress so far and experience elsewhere, the Revenue is unlikely to meet its target of 50 per cent take up of its electronic services by the end of 2005.


Publication details:

ISBN: 0102913536 [Buy from TSO]

HC: 492 2001-2002