‘Digital by default’ should not mean compulsion

Published on 12 December 2011

The Low Incomes Tax Reform Group (LITRG) has criticised HM Revenue and Customs (HMRC) for proposing to make it compulsory to file VAT returns online without any exceptions written into law. This follows the publication of draft legislation and HMRC’s response to a consultation in this area.

HMRC’s document, ‘Summary of Responses: VAT - consultation on the next steps for moving VAT online’ can be found using the link.

LITRG’s Technical Director, Robin Williamson, broadly welcomed the strategy to encourage businesses to move to digital channels where they are able to do so, in line with wider government policy. However, ‘Digital by default’ should mean just that – that digital is the default option, not the only one.

LITRG strongly believes that HMRC must commit themselves to permanent retention of a range of options, including paper filing for those who for genuine reasons cannot file online. Those genuine reasons must include not only religious belief, but also age or disabilities which inhibit use of computers, lack of decent access to the internet, inability to afford computer equipment, broadband connections and the like, and concerns about privacy particularly when using computers in public places.

The announcement by HMRC that there will be no additional statutory exemptions when online filing of VAT returns is made compulsory in April 2012 fails to take account of the difficulties faced by the substantial minority who are excluded from internet communication, and for whom HMRC’s ‘assistance into digital’ packages might not work. LITRG’s concerns are exacerbated by the fact that HMRC are not prepared to offer tele-filing alternatives in evenings, weekends and other times when small businesses are able to use them, nor are they prepared to allow paper filing to continue.

Given that HMRC have ruled out statutory exemptions, they must take care that such support as they are prepared to offer is fully effective in removing all barriers faced by people with disabilities and other vulnerable groups in complying with their recast VAT obligations. Otherwise HMRC risk infringing equalities legislation and possibly wider principles of natural justice.

LITRG does not believe that HMRC’s response to the VAT online consultation goes nearly far enough in assisting those hitherto fully compliant businesses who will experience genuine difficulties with fulfilling their VAT obligations online.

(12-12-2011)

Contact: Robin Williamson (please use form at http://www.litrg.org.uk/ContactUs)