Incentives to encourage online
filing
19. Businesses may consider that the costs of switching
to online filing outweigh the benefits of reduced error and small
savings in processing costs. On PAYE the requirement for employers
to file their PAYE end of year returns online started in 2005
(for 2004-05 returns). Small employers were offered tax-free incentive
payments of up to £825 over five years to file their returns
online before 2010. The Department had doubts over whether it
obtained real value from this premium and did not plan to offer
similar incentives on VAT or Company Tax returns. Lord Carter
of Coles' report rejected the option of offering new financial
incentives and recommended that resources would be better spent
on improving services.[34]
20. To increase online filing, businesses saw the
need for robust systems which ensured data security. Other measures
which would encourage them to switch included wider use of electronic
communications such as email, and provision of other functions
such as the facility to view their tax liability statement. A
business in the Netherlands can view an online statement of account
across all the taxes and duties it pays.[35]
Additional incentives used in other countries included quicker
refunds for online returns, longer filing periods, pre-population
of returns, specialist services for agents and public access to
online facilities.[36]
21. The Department accepted that before introducing
mandatory online filing it needed to improve the quality of the
online service so businesses would be willing to use the service
voluntarily.[37] The
Department was intending to consult its customers and their representative
bodies and software developers to identify their support needs.
It had adopted an international data tagging language ('XBRL')
to allow it to accept Company Tax returns with supporting company
accounts and computations from a business. It had worked to develop
standard VAT accounting software to help businesses get their
VAT returns right first time. It was working with tax agents and
other organisations, to improve the online guidance and the education
it provides particularly to new businesses.[38]
It proposed to draw on its experience of increasing the take-up
of online filing for income tax self assessment which reached
35% in 2007, and on the experience of other countries such as
Australia and private sector financial services. A particular
focus was to improve the help and assistance it provides to small
businesses to file online.[39]
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