Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 20-39)



  20. This was not a projection, this was an identification of a capability of the system in terms of not going into overload?
  (Sir Nicholas Montagu) Exactly, but based on a projection—

  21. So the real projection was not 315,000, that is what you could have done, and if you had gone over 315 you would have had problems? That is implicit in what you are saying. What was the projection?
  (Sir Nicholas Montagu) You are asking me for a prediction, not a projection—

  22. I am looking for a target. What was the target?
  (Sir Nicholas Montagu) We did not have targets, Mr Davies.

  23. So I have got this right—
  (Sir Nicholas Montagu)—It would not have made sense jumping into the unknown, as Sir John notes.

  24. I am just asking for the facts. You did not have a target but you had a projection that was not really a projection, it was an upper limit of capability of 315,000, was it—?
  (Sir Nicholas Montagu) It was our estimate, and the Comptroller and Auditor General uses the word "estimate", of what the maximum number of people wanting to file electronically might be.

  25. So what is your capability because obviously there are millions of these people, nine million self assessment taxpayers, and you could have coped with 315,000 but fortunately only 39,000 applied? Is that the situation?
  (Sir Nicholas Montagu) Broadly speaking, I think you are thinking of Figure 8 which refers to "unrepresented" taxpayers—

  26. So I am clear here. If for argument's sake—and I was about to suggest but perhaps I will not now—that of the nine million self assessment people five million do their own returns and four million have agents and accountants and the like, to what extent do you provide incentives and opportunities for these agents accountants to get their act together? After all, these are supposed to be professional bean counters rather than just business people? It is very disappointing that of four million agents, we only have tens of thousands putting these in. Why is that? Incidentally, if ten per cent of them put them in, your system would crash, from what you seem to be saying.
  (Sir Nicholas Montagu) What I am saying is that if the number is over the absolute maximum that we thought was possible, then there would have been much greater risk. We want it to be risk-free. So far as accountants and agents are concerned, there has been the facility for them to file by the internet since last November but, equally, of course—

  27.—How are they doing? There are four million of them. How many are doing it?
  (Sir Nicholas Montagu) I do not know if I have the figure. Barry will find you some figures. While he is doing so, can I make the point that what this hearing is about, Mr Davies, is e-services and we are not just talking about internet filing. The electronic lodgement service was introduced—

  28. But that is what I am talking about!
  (Sir Nicholas Montagu) Mr Davies, could I be allowed to finish my answers?

  29. I have got very little time and you are using a great deal of time to answer these questions. So I have got this right—we have got nine million self assessment forms and you were saying at the time 315,000 was the upper limit capability. What I was going to suggest was various ways of increasing the level of take-up. What is the level of capability that you could cope with now? If nine million people on self assessment did their returns electronically, could you cope with that?
  (Sir Nicholas Montagu) Virtually 100 per cent.

  30. You can do nine million now? A moment ago you were saying you could only do 315,000.
  (Sir Nicholas Montagu) Terry, do you want to comment on that?
  (Mr Hawes) It is a slightly more complex position than that. The major determinant is how many returns we can handle simultaneously, the messages actually coming in. So it is not the total number we might get but the total number we can absorb at a particular time. If they were spread evenly across the year we can accept vast numbers.

  31. What does "vast numbers" mean?
  (Mr Hawes) Well in excess of the total SA population because we have to size to take the peak input.

  32. If nine million applied within a month—because people do not put their tax returns in until towards the deadline for the tax year, do they—?
  (Mr Hawes) There is a complicated profile and quite a few come in at the last minute, yes.

  33. You know what the profile of applications empirically is of the people putting them in. If all these people put their returns in at the time they always put them in but put them in electronically, what proportion of those could you cope with within the time-frame they use?
  (Mr Hawes) We could probably cope with all of them but I have to say we have sized to take the sort of projections that we have got. We have looked at the loads on the system when it is carrying the current capacity and there would appear to be no problem in scaling up by very large amounts. The point that is very important here is in the early days we had to be careful to scale to a reasonable size so that we were not spending huge amounts of money on capacity we did not need. We also had to be sure that we had capacity. As the system has grown, bedded down and become more sophisticated, we can add simple extra capacity very, very quickly.

  34. It seems to me that what you are saying is you are gradually building capacity, so you are not going out gung-ho to small businesses, for instance, and telling them or training them how to fill in their forms so you can save £3 a time. Is that right, Sir Nicholas?
  (Sir Nicholas Montagu) I do not think that is right, Mr Davies.

  35. You are going out then?
  (Sir Nicholas Montagu) We are, and our business support teams all interface with small businesses and we would encourage them. Equally, a lot of small businesses will use agents or intermediaries rather than file themselves. We would welcome it from all of them. I can give you the figure you wanted now. 1,194 agents have registered for the internet lodgement service. That is in addition to the nearly 3,000 who are already using the electronic lodgement service for over 340,000 taxpayers.

  36. 1,194? So about 1,200 on the basis of about four million. That does not sound very good to me. These people are supposed to be numerate, professional advisers.
  (Sir Nicholas Montagu) We are talking about different things, Mr Davies. You are talking about four million taxpayers—

  37. Of the four million people who file tax returns, how many of those use the internet?
  (Sir Nicholas Montagu)—And I am talking about 1,194 of their agents.

  38. Sorry?
  (Sir Nicholas Montagu) I am talking about 1,194 of their agents registered to use the internet service.

  39. 1,194 agents out of a total of four million now?
  (Sir Nicholas Montagu) No. You are talking about four million taxpayers; I am talking tax agents.

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