By Maximilian Clarke

The drive by HM Revenue & Customs to increase online tax filings forms an integral part of the department’s ongoing cost reduction, yielding saving in excess of £126 million to date, the National Audit Office has said.

"HMRC’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,” said Amyas Morse, head of the National Audit Office.

"However, HMRC cannot demonstrate that the benefits are being maximised. Significant improvement is needed in its understanding of costs and benefits to inform future development."

Customers generally recognise the efficiencies and practical benefits that online filing offers although HMRC has yet to measure whether the anticipated benefits and costs to customers are being achieved in practice. Some users have concerns about the costs and usability of filing VAT and Corporation Tax returns online, and about delays in getting login details to access the Self-Assessment online service during peak periods. Levels of satisfaction with the assistance offered through various helpdesks also vary.
Online filing is delivering significant savings to HMRC, an estimated £126 million so far. The 2007 forecast was for savings of £145 million by the end of 2010-11 but the programme was subsequently rescoped because of departmental-wide funding pressures. It cannot demonstrate whether it is maximising benefits as it does not yet fully understand the relative costs of dealing with paper and online returns or the costs and benefits of seeking greater take-up.

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