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Free filing By Simon Sweetman
There is a little problem building up about online filing (not just that it doesn’t work some of the time)...As we know, HMRC provides its own free software for people to complete tax returns in many areas : for self assessment, for corporation tax, for VAT, and for employers with up to nine employees, for PAYE. Agents can use that as well, though most of them will actually use commercial software.
The Working Together professional bodies have now produced a Tax survey of their members (so that is across AAT, ACCA, ATT, CIOT, ICAEW, ICAI and ICAS), and they believe –that this should continue to be the case. The overwhelming view, it says, is that where there is an obligation to file online, free software should be made available. That would be my view, certainly. If the government requires online filing, then it should provide the tools. We don’t have to create our own paper tax returns.
Even though 81% of the respondents use commercial software themselves, a similar number thought it should continue to be made available to agents, 63% thinking that this means all agents of whatever size.
51% think that free PAYE software should be available to all employers.
And they think that this software should be paid for by the exchequer (rather than by the software industry), and that this should include telephone support.
So why is this a problem? Can we not just go on as we are? Why are they bothering to ask these questions?
The answer is that whatever Lord Carter said, he didn’t say that filing online should continue to be free. The software industry, not unnaturally, does not like the idea of free products competing with products they charge for.
But what does HMRC (who obviously have to rely on the software industry) think? In its notes for software developers in April, HMRC said this:
We believe that certain ‘entry level’ customers should be able to file online without having to pay for software. They need software and online support that is free. These customers are unrepresented individuals, small businesses and employers, and agents who file for a small number of clients where buying software is not commercially justified. To meet their needs we will move to a position where we will provide software for these ‘entry level’ customer segments across various products. We will agree the precise definition of the segments with the external stakeholders. But broadly we will target our free filing service at unrepresented:
As part of our online filing strategy we will review our position on this as the industry rises to the challenge of providing free software for the ‘entry level’ customer segments.
But if you think that if the government wants us to file online, it shouldn’t expect us to pay for it as well, you may be in for a shock.
AccountingWEB.co.uk 26-Aug-2008
Categories: Tax Features, Tax - Simon Sweetman
Times read: 1721
I am amazed by some of the responses below. Obviously anything the government does ultimately comes out of taxation, but I think that it is much fairer if, when government imposes a compliance obligation, it should bear the cost of that. Obviously there are thousands of times when that does not happen, but if there is one situation it should, it is with tax returns.
And I have no doubt that the option to do a paper return will soon be abolished. Not everyone is computer literate, and not everyone can use a computer or has easy access to one in sufficient privacy to do a return, let alone own one they can load their own software on to. The people most likely to be in this position are the ones probably least able to pay for or access professional help - such as some pensioners, as mentioned below, or individuals who dip in and out of employment and self employment.
Why are any pensioners, who's main source of income is from the state, included in Self Assessment? It's quite clear that the Revenue already has most of the information required, including Schedule E. If it is just a matter of assembling all the information in one place, then the Revenue is best placed to undertake that task.
That being the case, it is hardly appropriate to push Internet filing, especially when the 'free' software doesn't work half the time.
One solution that has been suggested is that HMRC withdraws its free software thus removing the need for it to spend money updating its own software. To balance this, ‘customers’ would have to pay to use commercial software but could then claim it against their tax bill.
Neutral cost for the individual, cost savings for HMRC that can be ploughed into the infrastructure and the software developers get a source of income to aid future development.
It's paid for out of taxation.
What's being suggested is that in order to fulfill our obligations to pay tax we should first pay a tax!!!!
e-filing makes it cheaper for the government not the users. Why should we pay for this twice?
We, as tax payers, will be paying for this software, it is not free.
Why do people continue to talk about 'free' software??
Anything for LLPs ?
