Review of HMRC Online Services

22nd March 2006 saw the publication of Lord Carter of Coles' Review of HMRC Online Services, which concludes that well-designed online services can bring benefits to taxpayers and the Government. The Government has welcomed his report, which is based on wide-ranging consultation with stakeholders, and accepted the recommendations.

The recommendations will come into effect in stages from 2008 onwards subject to the right services being in place, giving HMRC, businesses, agents and taxpayers time to prepare for implementation. The smallest unincorporated existing businesses, that do not have employees, will not be required to file online until at least 2012.

Lord Carter has recognised that HMRC will need to work closely with customers and software developers on implementation and on putting together communication materials for groups affected by the recommendations, and the department will begin that work today, setting up initial discussions over the next few months.

More details about this work and how HMRC will be taking it forward will be published on this website soon.

Overview of Lord Carter’s Recommendations

In July 2005, the Government asked Lord Carter to advise on measures to increase the use of HMRC’s key online services, in order to ensure sustainable and efficient service delivery for taxpayers, while continuing to support compliance. His report sets an aspirational goal for HMRC: to aim for universal electronic delivery of tax returns from businesses and IT literate individuals by 2012.

We and Lord Carter recognise that robust services will be central to the success of implementation, and HMRC will be investing some £340m in online service infrastructure over the next 9 years, focussing on improving the existing services so that they are more resilient and better meet customers’ needs.

The full list of Lord Carter’s wide-ranging recommendations, that HMRC will now be taking forward, are in his report. The key recommendations are that, subject to the right services being in place:

  • businesses should be required to file their VAT returns, Pay As You Earn (PAYE) in-year forms (the P45 and P46), and company tax returns online in phases from April 2008;
  • with effect from 2008, income tax self assessment (SA) returns should be filed by 30 September on paper, or by 30 November online;

Please note as part of the consultation exercise Lord Carter agreed to review the evidence for this recommendation. Having reviewed the responses received he has now revised his recommendation. A Ministerial statement was issued on 18th July confirming the Government’s acceptance of the revised recommendation that for 2007-08 and subsequent returns, the deadline for filing paper SA returns should be 31 October and the deadline for filing SA returns online should remain at 31 January.

  • a perceived barrier to early filing of SA and company tax returns should be removed by linking the period that HMRC has to query a return (the “enquiry window”) to the date it is filed; and
  • from 2007/08 computer-generated paper “substitute” returns for income tax self assessment should no longer be accepted, promoting online filing by agents and better quality data.

We expect implementation to bring benefits to businesses and taxpayers of over £175m p.a. by 2012/13, and savings in government administration costs of some £84m p.a. by 2013/14.