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National Audit Office report: The expansion of online filing of tax returns

The expansion of online filing of tax returns

The programme to increase online filing of tax returns has made significant progress, but HMRC needs a better understanding of the benefits and costs to customers and how its online filing costs compare to those for paper returns.

"HMRC’s expansion of online filing has been a real achievement. The programme is largely complete, to 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."

Amyas Morse, head of the National Audit Office

 

HMRC’s programme to increase online filing of tax returns has made significant progress. A National Audit Office report today has highlighted the Department’s achievement so far in increasing take-up rates and doing so on time and within a reduced budget. HMRC needs a better understanding of the benefits and costs to customers and how its online filing costs compare to those for paper returns.

HMRC was set an ambitious timetable to expand the use of online filing and now more than 11.5 million customers a year are submitting one or more tax returns online, generating significant savings. Take-up rates have increased significantly, particularly after mandatory online filing requirements have come into force. Nevertheless, take-up rates on some taxes (VAT, Corporation Tax and Self-Assessment) have been below original forecasts and HMRC has lowered its forecasts in the light of take-up achieved so far.

Customers generally recognise the efficiencies and practical benefits that online filing offers although HMRC has yet to measure whether the anticipated benefits and costs to customers are being achieved in practice. Some users have concerns about the costs and usability of filing VAT and Corporation Tax returns online, and about delays in getting login details to access the Self-Assessment online service during peak periods. Levels of satisfaction with the assistance offered through various helpdesks also vary.

Online filing is delivering significant savings to HMRC, an estimated £126 million so far. The 2007 forecast was for savings of £145 million by the end of 2010-11 but the programme was subsequently rescoped because of departmental-wide funding pressures. It cannot demonstrate whether it is maximising benefits as it does not yet fully understand the relative costs of dealing with paper and online returns or the costs and benefits of seeking greater take-up.

 

Publication details:

ISBN: 9780102969979 [Buy from TSO]

HC: 1457, 2010-2012

Published date: November 11, 2011