By Simon Moores, 31 January 2005 11:20
COMMENT It's time to pay your taxes... but the Inland Revenue site is down. What's going on here? Simon Moores explains...
It's 31 January and on the BBC Breakfast News, I watched an amused Declan Curry warn self-assessment taxpayers that they had until midnight tonight to file their annual return or face a £100 fine.
However, said Curry, so many people are trying to access the self-assessment website that the system is unable to deal with the last-minute strain. The Inland Revenue, by way of excuse, is pointing out that people had months to submit their returns.
Now imagine if this was Amazon or some other popular online site on the last shopping day before Christmas. Picture a spokesperson for the company telling angry and frustrated customers: "I'm sorry, it's all your own fault. You had 364 days to do your Christmas shopping and you can't blame us if the website can't cope."
Last year, of the approximately 9.5 million taxpayers who file returns, nearly 10 per cent missed the deadline and received an automatic £100 fine as a result; there's also an interest charge of 7.5 per cent on money owed, with a five per cent levy if the debt has not been paid by 28 February, and another five per cent on any money still owed on 31 July.
The Inland Revenue reported that by the end of December, it had received six million completed returns, paper and electronic, which very much looks as if the last minute rush will be a repeat of the previous year where once again the system suffered under the strain of being one of the few online government systems tested by taxpayers in any real volume.
The 31 January effect on the Revenue's servers is wearily predictable and if you follow the critical work of the Public Accounts Committee, the same may be said of the overall efficiency of our national tax collection system, which mixes unreliable IT systems and coercion in new and interesting ways that do the department and the government little credit.
The Revenue is, after all, no closer to discovering how many tax records on the PAYE database were accidentally deleted as part of a 'routine' housekeeping process last year and has admitted this is not a high priority. What, I wonder, happens if in future it discovers any records that were either underpaid or overpaid? Will the taxpayer be subsequently fined with compound interest or repaid in full?
Last week I met Roger Gale, MP for Thanet North. Pointing to a file of correspondence almost a foot thick, he asked me to highlight the failures in the tax-credit system is causing poorer families in his constituency. A much publicised software error caused the system to generate incorrect payments resulting in overpayment of tax credits to 455,000 households, amounting to some £94m. Of this amount, the Revenue is to write off overpayments individually less than £300, affecting 373,000 households and costing £37m. It will seek to recover larger amounts from 82,000 households, amounting to £57m.
"The problem," said Gale "is that the Inland Revenue freely concedes that in these cases it has made mistakes in the calculation of family tax credits. It apologises and then demands repayment of money that has already been spent. This causes very real distress and hardship."
Recently I attended the e-government awards in London and listened to our government CIO Ian Watmore describe the overall success of the e-government programme, in the face of what he views as frequently unjustified criticism from the media.
I would argue the programme has been successful in spite of and not because of central government and principally at the local authority level. The evidence shows that big government IT, whether this be the Child Support Agency or the Family Tax Credits, continue to fail the very people that need help most.
This shouldn't happen. It's a scandal that cannot be solved by throwing more taxpayers' money at technology and a cabal of failing public sector contractors. This is, however, a government in denial over the success of IT and until it wakes up and realises that processes and social justice hold an equal position with new technology we will all continue to be victims - and not beneficiaries - of the joined-up government experiment.
Comments
There are 10 comments. Join the discussion
1. Richard
No. Most tax credits are based on a fallacy!
Annual retrospective assessment of Income Tax only works for people whose income this year is fairly similar to last year’s and who have adequate spare cash to absorb the delays.
However, the incomes of people on the many means tested benefits often vary greatly from week to week and year to year. Most people have no spare cash and live from day to day.
It is crazy to base means tested benefits on “last year’s” income when the need is related to “this week’s” poverty!
No IT system can overcome such a basic design flaw.
This scandal really does need a political re-think. Far too many people are now on means tested benefits. In the very few cases where means testing may be appropriate, levels of benefits should be as “real-time” as possible, ie. Based on “last week’s” income not “last year’s.”
2. Alan Wyatt
As someone who has to fill in a self assessment form every year I have no sympathy for those who maon about the online system not coping. Both the problem and the deadline are well known, we have all had plenty of time to file our returns so why complain when you are penalised for being lazy and leaving it to the last minute. As for comparing it to Christmas, the only similarity is in the underlying drivers to the behaviour of the online system provider. Amazon spend money to make the system cope so they can make money, the Inland Revenue have every incentive not to make the system cope, so they can make money. Customers should understand the market drivers and play the game to their advantage.
As for cock-ups on the tax credit system, I have no sympathy with the Revenue they create chaos and then want their money back. In this case I don't think they should be allowed to claw back over payments which would force them to get it right first time.
3. Graham Jarvis
Taxpayers' money is being wasted, particularly as many public sector websites are failing to meet the latest accessibility standards, therefore denying many taxpayers their right to access essential services. The Child Support Agency is one of the better organisations, which meet, according to SiteMorse, a high level of website accessibility compliance; whereas the Disability Rights Commission is failing to meet even some of the basic standards.
4. Richard
Aw, stop moaning. I'm a chronic late tax-returner, but even I knew better than try on Monday. Thursday was fine. I had lost the paper return and the Guidance notes, but, flying blind, found the site easier to navigate than last year.
5. Ruth
Lucky Alan Wyatt who is obviously a very well organised person. Unfortunately, most of us are not & as the tax deadline is January 31st I think it is a reasonable assumption to expect the IR Online Assessment to be available until the deadline is finished. Particularly as it's our money that has paid for the system! I work in IT for a sales company with weekly booking deadlines - if my excuse for system failure half an hour before deadline was ' well, you could have booked this ad earlier in the week, it's your own fault that the computer system can't cope' I would very quickly find myself down the Jobcentre - and rightly so. The problem with the IR (as with most government departments) is lack of accountability - otherwise they would have to address the issue.
6. Dave
Due to disorganisation, illness and a family bereavement I posted my tax return at 8AM on Monday 31st. It took me 10 minutes! However as I had to pay some money I used the billPay system which took me nearly two hours (I wouldn't want to put a "powered by" advert on that piece of work). My view is that there is nearly 8 months to file the return so it's pretty dumb to do it at the last minute. I was lucky that mine went through OK.
7. Simon Moores
The deadline question is simply an unfortunate but illustrative detail of a much larger problem. The Inland Revenue consistently fails in its duty to the British taxpayer in every conceivable area of its work. It hides behind a lack of accountability and transparency and is constantly economical with the truth until, like yesterday, it is forced, very reluctantly to admit its failings revealed by stories like this one.
8. anonymous
I must take exception with the part of this article which describes these problems as 'wearily predictable'. Last year the IR servers handled over 25,000 returns on the peak day with no performance problems at all. In fact, the feedback forms indicated that user satisfaction was overwhelmingly high with the service. I was invovled in the coordination efforts last year to ensure sufficient capacity was available and to monitor the results. If you can find a single piece of bad press from last year regarding the service I would love to see it.
I wasn't involved in this year's planning so I can't comment on why there were problems.
I agree, however, with Simon's other comments about the failure of IT projects in the IR and other government departments. Much of the problem seems to me that there is little incentive to learn from past mistakes. Unlike a commercial organisation, government departments cannot go bust so they are free to repeat their mistakes and the taxpayer is left to foot the bill.
9. John Lait
The bulk of the comments about the IR computer problems ( on both sides of the argument ) are irrelevant, although I do not dispute the feelings generated by the matter. In simple legal terms the IR give it's customers up to and including the 31st Jan to file online. This forms part of the contract between the IR and the taxpayer ( customer ). The customer has a duty of care to submit an honest tax return no later than the 31st Jan and the IR has a duty of care and diligence to ensure that the customer is able to file up to and including 31st Jan since the 31st Jan is a date set by the IR. Any taxpayer who could not lodge and gets fined should refuse to pay and insist that the IR take court recovery action which can then be defended.
10. anonymous
E-government undoubtedly is failing taxpayers and other subjects alike. The Inaland Revenue is highly unaccountable - I wrote to the Chairman of the Public Acocnts Committee and asked what oversight he had of the IR's activities. He never did answer, but a gentlemen from the NAO rang me and said that he was allowed to confirm all the money collected went to the Treasury, but could look no deeper. Internal IR auditors dealt with everything else and it was not his problem ! Quis custodiet custodes? If you think the Home Secretary is taking on too many powers, you only need look at the IR to see that the Home Secretary is nothing to worry about. Even Parliament and the NAO are not allowed in!
For those knocking IT contractors, look for the common factor in these failing IT projects - politicians and civil servants.