The HM Revenue and Customs website is a “maze”, and tax forms are too difficult to fill in, according to a report.
As a result of the complications, taxpayers underpay by £330 million each year, the Committee of Public Accounts said in its report ‘HM Revenue and Customs: Helping individuals understand and complete their tax forms’.
The committee, which audits government spending, said the government had “a lot of room for improvement”, and needed to better explain how taxpayers should fill out forms so that fewer mistakes were made. Some 3.8 million people completed their tax returns by the deadline in January.
“Completing a tax form should be a lot simpler,” said Edward Leigh, chair of the committee, adding: “The department's website is still a bit of a maze.”
The government needed to improve the HMRC website immediately instead of waiting until 2011, it said, when the Direct.gov website is due to become the main web channel for citizens. The Self Assessment form was the only income tax form available to be completed online, and the committee said more forms should be placed on the HMRC website.
HMRC spends a large amount of money answering queries on how to fill in tax returns, the committee said. Each year, £55 million goes towards answering 12.5 million enquiries via its website, call centre and face to face.
The office had estimated it would save over £100 million in total if it could encourage more people to use its website and find the information there. It was investing £170 million in upgrading its online services following Lord Carter’s Review of Online Services in 2006.
But while that review set HMRC a goal of universal online delivery of tax returns from IT literate groups by 2012, so far only 35 percent of self-assessed returns were filed online, even though the government had met its own targets for 2008.
In March, a report by the National Audit Office said up to five million British citizens had been incorrectly taxed by the IT system.
In January, the self assessment website went offline on deadline day. HMRC has still not explained the reasons for the incident.
HMRC is overhauling IT to reduce running costs by 10 percent by 2010-11, under the £8.5bn Aspire contract with supplier Capgemini.