The CIOT, ICAEW and ATT have given the thumbs’ down to HMRC’s recent consultation on compulsory online filing for all taxpayers.

HMRC put its consultation "Digital by Default" out for comment in the summer. Looking at the consultation and what HMRC is currently doing in respect of online filing, it could be debatable whether HMRC is genuinely interested in what anyone has to say. It is already steamrolling ahead with programmes for compulsory online registration for taxes and compulsory filing of VAT returns. 

The concern for both taxpayers and agents is that HMRC's "digitalisation" process is going too fast and not being executed in a joined up fashion. Whilst all the tax bodies seem to agree that that Government services should be made available online, it seems that they feel that it would like to wait for existing services to bed in before HMRC embarks on further costly and expensive changes to its systems. 

There are some fundamental issues which HMRC has failed to address that affect a individual's ability to use digital services such as:

  • Lack of broadband and mobile phone coverage in rural areas
  • Unavailability of super fast broadband in many counties (not scheduled until after 2015)
  • Many of the older population still unable to use or not wanting to use computers

The tax bodies also voice concern over HMRC’s proposals for new online registration wizards. All focus is directed to the micro-business and those unrepresented by tax agents. The fact that tax agents are the main users of these forms and the ones who are going to have to use them repeatedly for SMEs seems to be overlooked in the design process. 

HMRC’s attitude to consultation has been much lamented by Anthony Thomas, new president of the CIOT. He has already voiced concerns over HMRC’s Business Records “Pilot” and Agent Strategy, where it is evident that policy has been set before the consultation period has closed. It seems that the same alarm bells are now ringing over HMRC’s plans for online filing. In its response to the consultation the ATT noted that HMRC had declared compulsory online filing for Corporation tax a success despite the fact that it was actually impossible to file online at the time – HMRC’s systems had not been updated. 

As the ICAEW says in its response to the consultation, “We believe there is a considerable distance between ‘actively encouraging’ people to do something and making it virtually impossible to do things any other way.


HMRC consultation: Digital by Default


Chartered Institute of Taxation (CIOT)

Institute of Chartered Accountants in Englance & Wales (ICAEW) 

Association of Taxation Technicians (ATT)