A notice posted on the Revenue's site states: "Due to an unprecedented increase in the number of customers wanting to use SA Online, at certain times some are currently unable to gain access. We are working around the clock to remedy this."
One CW360.com reader was told by the Revenue's helpline that the system was unlikely to be working again until after 30 September.
"It makes you wonder what is likely to happen in the days leading up to the January deadline after which fines are imposed," he told CW360.com.
A Revenue spokesman said 113,000 people were now filing online, up from 76,000 for the whole of last year. "The system is working but it is very slow and many people can't log on. We want as many people as possible to file online and we are clearly not happy with the delays." The Revenue and its technology provider EDS were investigating the problem, he added.
Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, described the situation as "a fiasco". "Less than 2% of taxpayers file online and if the system can't cope with such low volumes, how is the Inland Revenue going to convince others to use the system?"
New users are unlikely to be impressed by the notice on the self-assessment site, which says "please try to avoid accessing SA Online between 19:00 and 23:00 in the evenings," said Chowdhury. The US government has a quarter of taxpayers filing online with few systems problems, despite charging for the service, he added.
Chowdhury believes the Revenue needs to get the system running trouble free for at least a year before users will have confidence in the system.
The current problems are the latest embarrassment for the Inland Revenue's flagship online project, following a major security breach and a damning House of Commons Public Accounts Committee report earlier this year.
Last month the Liberal Democrats revealed that the Inland Revenue's online tax return system was costing the public almost four times more than the original postal method of tax filing.