The Low Incomes Tax Reform Group (LITRG) have issued a strong warning to HMRC about compulsory online filing

 "nobody must be forced to do so - particularly if they cannot, or would find it very difficult to, use a computer or the internet."

LITRG set out their position in responses to two HMRC consultations, Digital by Default and Next Steps for Moving VAT Online. This comes as the National Audit Office publishes a report today on online filing of tax returns. 

LITRG’s Technical Director, Robin Williamson, explained: 

“There should be no statutory requirement that people must deal with HMRC by digital means, and there must be robust, well-advertised alternatives for those who find it impossible or difficult to transact online. 

“Encouraging businesses to move to digital channels as the default option for filing tax returns and communicating with HMRC is reasonable and sensible. But, as ministers have acknowledged, they cannot leave behind those without internet access or capability. 

“Without satisfactory, fully safeguarded, non-paper alternatives, we see no alternative to the retention of a paper channel for those who are unable, or will find it excessively difficult, to move to digital. This includes those who are unable to use the internet because of lack of capability through age, disability or other circumstance, inadequate internet or broadband access, affordability or a mixture of these. HMRC are maintaining the paper option for certain existing filers with objections to online filing on religious grounds, so it ought to be simple enough to allow others to use that same route. 

“The Government could minimise the number of businesses which would need to take advantage of this option by providing tailored support for those who want to move online but are finding it hard to do so.”

LITRG has been supporting several business owners who have been unable to file online in appeals against VAT online filing notices. These appellants are awaiting the outcome of this consultation. Their experiences are typical of many who have difficulty in moving to digital channels. 

Robin Williamson said: 

“It is impossible for many small businesses to be viewed separately from their proprietors. Effectively, the digital exclusion issues (age, disability and so forth) of the proprietor are problems for the business itself. 

“In our response to the ‘Moving VAT Online’ consultation, we have outlined the need for exemptions from online to be set out in legislation where online filing is mandated by statute. Those comments apply equally to the mandation of PAYE online filing for employers.”