HMRC's online plans are unfit for purpose

The HM Revenue & Custom's (HMRC) plan to make computer filing VAT returns on its website compulsory fails to consider criticisms that its existing online systems are not fit for purpose. 

The Commons Treasury Committee, which has carried out a report into the administration and effectiveness of HMRC is risking making a bad situation worse by recommending that HMRC implements even more digital services – despite recognising numerous flaws in the department as it stands.

While contributing to the committee's investigation, the Forum of Private Business (FPB) said that its small business members' complaints, citing HMRC's complex and inefficient online processes – made more alarming given plans to force qualifying businesses to file VAT returns online by April 2012.  

Given the inadequate/sub-standard levels of service they experience many entrepreneurs view HMRC's attitude to the difficulties they face when negotiating the UK's complex tax system – including fines in excess of £3,000 for record-keeping errors and targeted investigations - as somewhat hypocritical.   

FPB representatives have been attending meetings of the Joint VAT Consultative Committee (JVCC) for several years and HMRC's systemic shortcomings are are repeatedly documented.

The news comes at a time when another survey by the Institute of Directors and The Taxpayers' Alliance claim that HMRC has lost out on £27.4 billion of tax in the past five years. The study centres around data regarding tax write-offs and  tax debts deemed not worth pursuing on the grounds of official error or uneconomical pursuit. Chief Executive of the Taxpayers' Alliance is Matthew Elliott. He is quoted as saying: "Taxes are a challenge to administer and a burden on families and we need systematic reform to produce a simpler tax code,". He also said: "Some of this uncollected tax will be down to the recession but there is clearly a long-term problem as well. Tax shouldn't be so taxing that even HMRC can't keep on top of it."

For more news on HMRC's tax and law changes go to www.stmworldwide.com/news.