By Nick Mann | 11 November 2011
Revenue & Customs needs a better understanding of the costs and benefits of its online tax return system, the National Audit Office said today.
R&C launched a programme in 2007 to significantly increase online filing of returns by both businesses and individuals. In a report published today, the auditors found that, to date, this had delivered an estimated £126m in savings by reducing processing, storage, stationery and postal costs. More than 11.5 million customers are now submitting one or more tax returns online each year.
But the NAO noted that the savings made by the end of 2010/11 were 14% less than the £145m originally envisaged.
And it said R&C was unable to demonstrate whether it was maximising the benefits of online filing and getting value for money from the system because ‘it does not yet fully understand the relative costs of dealing with paper and online returns’.
It raised similar concerns over the department’s understanding of the costs and benefits the online system offers its customers. Estimates from 2009 that it was saving customers between £60m and £97m a year had not yet been tested by assessing the actual costs and time involved in filing returns online, it said.
The NAO explained that this was particularly important given the department was now aiming to increase take-up of online returns further.
Amyas Morse, head of the NAO, said: ‘R&C’s expansion of online filing has been a real achievement. The programme is largely complete, to time and budget, and more than 11 million customers are filing online. It is an integral part of the department’s drive to increase efficiency.
‘However, R&C cannot demonstrate that the benefits are being maximised. Significant improvement is needed in its understanding of costs and benefits to inform future development.’
The NAO also highlighted a lower than expected take-up of online filing for business taxes. The 67% of VAT returns and 42% of Corporation Tax returns filed online in 2010/11 were around 20% lower than forecast.
Commenting on the report, an R&C spokesman highlighted the increasing numbers of people using the online system.
‘Our online services have, this year alone, enabled a record 6.9 million people to send their self assessment tax returns to us over the internet. In addition 93% of company returns and over three-quarters of all VAT returns have been come in over the internet,’ he said.
‘In excess of 11 million taxpayers now take advantages of our online services enjoying many benefits and saving the taxpayer £60m a year.’
