HMRC have been writing to accountants and other agents who file on behalf of clients to encourage online filing of self assessment tax returns.  In particular, they have been targeting those who still file paper tax returns.

In their communication, they identified benefits of the service as:-

• An instant acknowledgement as soon as HMRC receive your tax return.
  • Tax worked out automatically as you complete the form so you know what you owe or are owed right away.
  • Online tax returns are processed faster than paper returns and any money you are owed by HMRC is repaid to you more quickly than if you file on paper.

Obviously, HMRC would like people to use their own system, but we say whether you choose to use an accountant or other professional or use online services such as Tax Returns Made Simple.com, you should think carefully before using HMRC’s own system.

A recent Panorama report on the BBC suggested that as many as one in three tax payers are paying the wrong tax because of fundamental flaws in HMRC systems.

Apart from the obvious reason that their systems are in such disarray as has been very widely reported, their systems just won’t provide you with the insight, tools and other tips to save tax that you would get from an independent party.

We are pleased to hear that HMRC are encouraging the filing of income tax returns online, but be warned, think very carefully about using the HMRC system.