Far too few firms are filing their tax and VAT returns
on time and taking advantage ofonline facilitiesto do so, according
to areport published by the parliamentary Public Accounts
Committee (PAC).
Edward Leigh, chairman of the PAC, said, "HM Revenue &
Customs must ensure its online services for VAT and company tax
returns are not only sufficiently robust and secure, but also offer
facilities which sell the idea of electronic communication and
online filing to businesses. And the department must go further
than it plans at present to lighten the administrative burdens
associated with compliance."
HM Revenue & Customs spends more than £9m a year on
processing some nine million VAT and company tax returns, and
incurs further costs in chasing businesses for overdue returns and
correcting errors.
Since the Revenue introduced
online filing for VAT returns in 2001 and Company Tax returns
in 2003, take-up by businesses has been low, said the Public
Accounts Committee.
The department does not expect to meet its Public Service
Agreement target to get 50% of VAT returns filed online by
2007/08.
Its plans for introducing mandatory online filing have been put
back to 2010 for VAT and 2011 for company tax returns.
The Public Accounts Committee report says HM Revenue &
Customs expects online filing to save most of the £9m a year it
currently costs to process paper returns. It estimates that a
typical business will save £5 per VAT return and £20 per company
tax return by filing online.
Online filing also brings added benefits because the potential
for error in the returns is reduced, said the PAC.
Read the Public Accounts Committee report >>