The Inland Revenue has been referred to the Office of Fair Trading (OFT) for handing out free Microsoft tax software.
The software giveaway began after the Revenue and IT outsourcer EDS abandoned efforts to produce a downloadable return for the much-publicised online tax filing service (Computer Weekly 6 July).
Instead the Revenue sent out CD-Roms of Microsoft Taxsaver 2000 Lite software to thousands of taxpayers who registered for online filing.
David Forbes, of Forbes Computing, who reported the Revenue to the OFT, was livid that up to 20 other UK tax software providers who helped the Revenue prepare the Web site were ignored.
"We are happy to take on Microsoft on a level playing field," Forbes told Computer Weekly. "However, taxpayers' money is being paid to Microsoft to give away its product for free. It is heavily promoted on the site of a government body. This must be against the spirit of the Competition Act."
Basda, the accountancy software providers trade group, has given Forbes Software its full backing. Dennis Keeling, chief executive of Basda, said, "We take this very seriously. We have written to the Inland Revenue and provided information to the Office of Fair Trading to support David Forbes' case.
"We were invited by Microsoft a year ago to assist the Revenue is constructing XML standards for self assessment. Our members were suspicious that Microsoft was leading the working party, but we were given assurances that everyone would be treated equally. That has not happened."
Basda's working party on XML standards for online self-assessment has been reduced from 17 members to just two, Microsoft and Which, in the aftermath of the Revenue's decision to promote Microsoft's product. Basda fears the Revenue is approaching other software houses to make them, in effect, preferred suppliers of other solutions.
The Revenue would not comment on the case except to say, "We work closely with the software industry and will continue to do so."
Meanwhile it is still re-keying self-assessment returns filed over the Internet (Computer Weekly 13 July).