Electronic Lodgement Service will stop in March 2006

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HM Revenue and Customs has announced that its Electronic Lodgement Service (ELS) will accept its final tax return on 31 March 2006.

The demise of ELS has played like something out of a Verdi opera since the first intimations of its departure in 2002, when the Inland Revenue put users on notice that ELS would be withdrawn "once confidence is established in the new Internet-based services".

The Revenue intially planned to run ELS up until April 2004, but following consultations with tax agents who used the service, it relented and extended the service's lifespan as filing by internet FBI suffered a security scare in 2004 and well publicised bottlenecks in January 2005.

But figures previously published on AccountingWEB indicated the inexorable rise of FBI, as ELS use plateaued at around 400,000:


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05th Oct 2005 18:00

Neville, foreign is no problem
The HMRC free software doesn't have foreign pages on it. However there is plenty of commercial software similar to that you use for ELS which will deal with this OK. The foreign pages of your tax product will file fine over FBI.

Other comments on 64-8 highlight a key problem, but you will soon be able to file returns without having a 64-8 logged. You will not be able to access the client details online, like his account etc, but you will be able to file online.

I moved last year having ELS'd since the start of SA. Subject to the capacity problems at the end of January I'm very happy, and the extra functionality that HMRC are building onto FBI / online systems are definite bonuses.

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28th Sep 2005 13:47

can't use both
I have used ELS since inception and find it very easy to use with no problems.
Now I will have to change over completely to FBI.
Why I can't use both at the same time is a mystery.
Using both would have allowed me to sort out any errors and still able to file on line.
On line seems better for individuals to file but ELS is better for agents - or am I being pessimistic????????????????

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28th Sep 2005 14:02

If the profession allows the Revenue to cancel ELS support before FBI is even capable of the submissions we regularly make we are not doing our job.
I am reliably informed that FBI cannot accept non-resident returns. These are often the Returns which are completed late in the year and electronic filing is irreplacable.
Nor can it accept prior years. New clients who come to be brought up to date invariably need back year returns, and are often the subject of collection procedures. As old returns are merely counted as post by HMRC and processed eventually Collectors can take a very jaded view of our submissions. ELS means instant reductions in charges for their collection and corroboration of our calculations. Add these issues to the standard problems of internet based products and this withdrawal of support cannot be acceptable.
I accept that ELS has costs but I think that it is only the provision of free software which has enabled many small practioners to use FBI where ELS is not a justified cost.
I would be interested to know whether any of the major tax software providers ahd said they were withdrawing support before this announcement. We need to react now before it becomes a self fulfilling prophecy!!

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28th Sep 2005 18:22

Please tell me precisely what is wrong with ELS.
It works when FBI doesn't, it allows attachments when FBI doesn't, it's secure and private when FBI isn't always...
This is a backward step for everyone, not least the Revenue: we'll now be posting in the attachments (no wonder they say they don't want them), so more cost for us, more hassle and paperwork for HMRC.
Has anyone there costed out what it would take to update the hardware against what it will cost to process manually that which is currently sent electronically?
Or is this just so HMRC can meet its targets on doing business over the internet?

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29th Sep 2005 08:54

Don't knock it until you've tried it!
I too was very sceptical about switching to FBI from ELS. By the way we've never been able to submit attachments with ELS returns so I'm not sure what exactly is being referred to in previous posts. There are plans to be able to submit attachments with FBI returns shortly. We are in fact currently running ELS and FBI side by side in our office, our tax software allows us to do this easily. So far we have had no problems whatsoever with FBI and will be making the switch in time for the Revenue pulling the plug on ELS. The response times are faster with FBI as you find out straight away if the Return has been accepted or not. Another advantage is that the Additional Notes entries are fully captured with FBI rather than being kept on a separate record which the Inspector often ignores. Many of the initial problems with FBI have been sorted out. Don't forget that there were glitches with ELS when that first came out too. I think there are still some improvements to be made to FBI and these will happen over time.

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By Anonymous
28th Sep 2005 20:22

I can only agree with the previous answers. We have been using ELS since its inception and have had very few problems, particularly when I hear of the problems other firms have with FBI. Can the Revenue system cope with the extra 350,000 returns that will have to be filed by FBI if ELS is not available? Not if the experience with end of year PAYE filing is anything to go by. And as has rightly been said, we will be adding to the Revenue's paper mountain by sending enclosures by post

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By ambian
29th Sep 2005 10:19

Changing from ELS to a poorer product
I have used ELS since its inception and it has been a thoroughly reliable system. My experience of using the Internet system for PAYE has shown that the systems on the internet are not as reliable as ELS. Today’s post contains a message that should have been sent via the secure messaging service, but had to be sent via “snail mail” as there was a “problem with the secure messaging service”.
I agree with Marion Hayes that the ability to file previous years electronically is one of the major benefits of the ELS system. Past experience of the governments introduction of new facilities suggests that it will be 2009/10 rather that 2006/7 before they are introduced and working successfully.
HMRC should reconsider their decision. Forcing agents to transfer to an inferior product is not in the best interest of either the HMRC, agents or Taxpayers.

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29th Sep 2005 09:10

No Prior Years in FBI and no plans for it either
Even if the farce regarding the requirement for 64/8s to be processed first before filing by FBI is sorted out and it is a big if, FBI does not accept prior years' Tax Returns.

I file many prior years' tax returns by ELS simply because FBI will not accept them.

We are constantly being exhorted to move to electronic filing and now will be totally unable to file prior years' returns by this means since there do not appear to be any plans to allow this by FBI.

Oh well, one step forward and two steps back - I suppose we should expect nothing less!

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29th Sep 2005 12:56

I know it is selfish
but personally I welcome the decision (as one who is required to use FBI rather than ELS anyway). The sooner that the big 4 are forced to use FBI the sooner that they will bring their considerable influence to bear on improving the aspects that need improving.

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29th Sep 2005 11:09

Bye bye to ELS!
I have a long-term interest in this subject given that I worked at software house CSM and was the Tax Consultant there charged with ensuring that our personal tax product got its ELS approval. So I know of the technical difficulties in those early days. The word nightmare seemed very appropriate at the time. Certainly the Revenue technical people and their colleagues at EDS went through a steep learning curve like those in software houses battling to get approval for their software products.

So now the announcement of the demise of ELS is not unexpected but must be tinged with a feeling of sadness. But times move on. Personally I have not used ELS for a few years and find the FBI offering now works well. And not just for Self Assessment returns. Only 20 minutes ago I was submitting a client's VAT return. Filing by Internet works effectively. Let's all now use it, especially those who have continued to stick with ELS until its death.

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29th Sep 2005 13:21

In answer to the point on attachments on ELS, it's quite easy - we've done it for 4 years now, attaching up to 3 items (we do the comp, accounts and a detailed schedule of interest, dividends, etc).

And no, we're not a big firm - just a small rural practice - this is definitely not a product just for the Big 4.

Hands up who thinks attachments are coming on FBI - HMRC seems to have gone quiet on this one (it's many months ago that they said they were working on it, since when they have said nothing).

Why kill something that works and that offers more than its replacement?

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By Anonymous
29th Sep 2005 14:28

Look forward, not back
I agree with Helen - don't knock it until you've tried it.

FBI was much better in 2005 than in 2004. In reality, there was only one major hiccup, on the Sunday before the filing deadline, when (it is reasonable to assume) lots of individual taxpayers logged on to complete the form on-line, and probably stayed logged on for hours while they looked for P60s, P11ds or dividend warrants, or simply took the dog for a walk. The day afterwards, it was fine.

This could easily be solved by a separate site for professional firms to file, where the return is prepared offline and there is only a need to log on for a few seconds to upload it. It's also solved by keeping off the system on Saturday and Sunday 28/29 January next year.

If there are good things in ELS not in FBI, why not concentrate on transferring those things to FBI? I've never had the need to send an attachment with a form, and very rarely a need to send additional documents with a paper form, so (for me) the fact that it's not in FBI doesn't matter. There is no NEED to send accounts, computations or detailed schedules - they are not part of the return. If you CHOOSE to send them, that's up to you, and in some cases further explanation may be neccessary, but those should be exceptions, not the rule.

I'd prefer to concentrate on improving the FBI service by, for example, including client names in communications, not just reference numbers. Not to mention processing 64-8s within the timescales promised, not taking more than two months as in one current case.

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29th Sep 2005 15:21

ELS v FBI - the jury's out
We used ELS for several years before switching to FBI this year for the 2005 Tax Returns. We switched because we knew ELS was coming to an end and so felt it was better to switch “voluntarily” rather than be forced.

How have we found it? The big plus about FBI is that at the moment Returns are accepted within seconds, compared to about 24 hours for ELS. We can also file over our broadband connection – no need for a modem etc. But there have been problems too. FBI won’t accept formatted text in the white spaces on Tax Returns – so we have had to re-write our white space notes. Also the FBI rejection messages are meaningless compared to ELS. But one of my main concerns is electronic Statements of Account. We received these through ELS. We could review them enmass taking just seconds to identify problem cases (mainly tax refunds that had not been automatically repaid). SoA are not issued through FBI. Yes we can log into the website and get the latest figures – but it would take hours to trawl through all our several hundred client’s SoA – we don’t have the resources so we don’t do it.

But my main concern is whether the FBI system will be able to cope with demand in January. Whilst FBI had big problems January 2005, ELS performed faultlessly for us. We’ll just have to wait and see.

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30th Sep 2005 08:41

Fundemental problems with FBI.
As a small sole practitioner who has used ELS from the early days I am reluctant to see it dropped before FBI is as good.

The real asset of ELS is that it works reliably and you can file a return for a client so long as you have a UTR. Whether I get an acceptance instantly is irrelevant, 24 hours is fine.

The current problems with FBI, from my perspective are that:
1. it is prone to volume overload, as we saw last year.
2. you have to have a 64-8 in place and with the current processing time for 64-8s this is a real problem.
3. it doesn't accept foreign income (this has become a particular problem with the sale of Abbey National to Banco Santander).
4. you cannot file prior year returns.

I can't remember the last time I filed a paper return, but I get the feeling I will be now.

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