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How to avoid tax return hell

Posted on 12 Jan 2009 at 10:44

"For performance testing, the load is generated through automation, but the user experience during this load testing is also validated by manual confidence checks."

Critics say, however, that testing the system through simulation is no guarantee the hardware will be robust enough. "It doesn't follow that just testing the system will actually recreate what will happen when an individual might take an hour to file - they're on there for more time than most agents that are tested," said Simpson.

And despite the assurances of additional investment in the infrastructure, at least one shadow minister remains unconvinced. "I was speaking to some Public and Commercial Services Union representatives from HMRC last week and none of them were aware of any additional support for online filing," he told PC Pro.

Form-filling fears

As well as beefing up the system, HMRC has updated the web forms used by most individuals to file online. While some users have welcomed the changes, tax professionals are unimpressed, with the Working Together E-Group survey of 500 tax professionals being particularly damning. "At a time when HMRC is investing in improving the online system, we were very disappointed to find that 85% of respondents says that the system was worse or no better than last year," said Tina Riches, technical director of the Chartered Institute of Taxation.

Still, one end user, retiree Peter George from Bromley, reported no problems when he filed early using the new system and welcomed the fact that there was more scope for including unusual earnings. "They seem to have made it simpler - all the forms were clear," he said. "I used to have to make all sort of attachments to include shares earning, but there's space there for that now."

Nevertheless, tax software experts expect to see a surge in calls to support centres as people struggle to fill in the new forms. "They've made lots of form changes this year," said Andy Hardy, development director at tax software provider TaxCalc. "They might be easier, but change always causes confusion. For many people, the easiest way to complete the forms was to use last year's as a guide, but you can't do that this year - there are too many merged boxes."

Lack of confidence in the system is one reason for considering the accredited commercial software listed here. The big question for many personal taxpayers is whether it's worth investing £20 to £30 in third-party software rather than using the self-assessment website?

"Probably the biggest advantage is that you can work offline, so when it's peak filing time and the system is subject to loading problems you won't be waiting around," said David Forbes, managing director of Forbes Computer Systems, which produces tax software, primarily for accountants. "You just connect to transmit."

Software also comes into its own if your return is complicated with a slew of complex investment earnings and capital gains because, although the new forms are simpler, they offer no hand holding. "Essentially, it's a form-filler so you need to know the answers," said Hardy. "It doesn't work out tax-credit relief - you need to know the answers. There's no help working out indexation relief, taper relief, or the gain, and now you have to show your workings for each capital gain (and attach it as a PDF), and this is all much easier with commercial software."

Software providers also claim to eliminate errors by cross-checking against the HMRC rules. "This means that there is a far greater chance of your return being accepted," said Phil Donathy, head of product management for Sage Accountants' division. "We have a 99.7% success rate for online submissions of individual and partnership returns, which is better than the HMRC's own success rate."