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How to avoid tax return hell

Posted on 12 Jan 2009 at 10:44

Millions will soon be filing their online tax return. Stewart Mitchell reveals how to avoid disaster.

If you haven't already filed a paper tax return, you've now no alternative but to submit details of your earnings online - and get ready to join the scrum if you leave it until the last minute.

With the deadline for filing paper returns brought forward to 31 October this tax year, Her Majesty's Revenue and Customs (HMRC) expects even more taxpayers to use the web service. "This year, our aim is to achieve 58% of self-assessment returns filed online," HMRC boldly states. That would put the number of people filing over the web at 4.6 million - up from 3.8 million last year.

Yet last year, with 860,000 fewer online transactions, the HMRC's website collapsed under the weight of deadline-day traffic on 31 January, leaving 20,000 people unable to log in and file.

Will the tax site hold up under this year's increased weight of traffic? We've talked to the Government and industry experts to find out whether we're in line for yet another deadline-day disaster.

And to help you avoid that last-minute hell, we've provided reviews of four leading personal tax software packages that are guaranteed to work with the Revenue's electronic submission system.

CLICK BELOW FOR REVIEWS OF TAX SOFTWARE
Andica Self Assessment Professional
Ftax Individual
ProTax Light
TaxCalc 2008 Personal 6

Last year's lessons

In the business world, it would be catastrophic if the payment system for the entire year's income collapsed on the busiest day of the year, yet no-one was particularly surprised that the HMRC's IT system let it down again in 2008. "It happens every year, because the HMRC is desperately over-stretched," Vince Cable, Liberal Democrat shadow chancellor and deputy leader, told PC Pro. "I just suspect the Revenue isn't capable of handling more demands."

And while the big crash on deadline day grabbed all the headlines, tax professionals had been complaining for weeks that the system was creaking. "Even in the last two or three weeks, as the number of people filing continued to rise, the system couldn't cope," said Paul Simpson, web analyst at technology integrator ATC Solutions. "It kept saying, 'Please try later', which was frustrating, as there was no real information available. The worst thing was that it was predictable - it happened the year before, too."

HMRC blamed last year's meltdown on a number of factors, most notably legacy servers that lingered from before the HMRC was formed. "A problem with a hardware component within the old Inland Revenue portal caused a partial failure of the system," said a spokesperson for the HMRC. "This meant that some customers using the HMRC Self Assessment online application could not log on." The department said that in April it "replaced the component that caused the problem at the end of January".

Given the history of technical problems at HMRC, new systems should be treated with suspicion, but the department claims that by the middle of October 1.5 million people had already filed online, and that thorough testing meant it should be capable of handling the January rush. "The system has been tested to manage volumes that are greater than our projected volumes," the HMRC spokesperson said. "We have moved to a more iterative approach and we now undertake the testing necessary down to component level, testing each to destruction and analysing the effects of these failing.