Online tax system 'too risky' for the famous[UK]

The security of the online computer system used by more than three million people to file tax returns is in doubt after HM Revenue and Customs admitted it was not secure enough to be used by MPs, celebrities and the Royal Family.

Thousands of "high profile" people have been secretly barred from using the online tax return system amid concerns that their confidential details would be put at risk.

This provoked anger from consumer groups and accountants who said the same levels of security should be offered to all taxpayers regardless of their perceived fame.

HMRC was responsible for losing 25 million child benefit records and the latest admission will concern millions of people entrusting the online system with their confidential financial records.

From this year, anyone wishing to file a self-assessment tax return after October will have to do so online or face stiff penalties.

However, HMRC has a list of those excluded from the new rules who must send hard copies of returns for "security reasons".

Hundreds of thousands of people are expected to use the electronic system to make the Jan 31 deadline this week.

Tax records contain bank details, national insurance numbers, salary and details on investments and savings - all valuable to fraudsters.

On Friday, senior accountants said they had concerns over the security of the system - apparently confirmed by the Revenue's secret policy.

Mike Warburton, of the accountants Grant Thornton, said: "Either the Revenue have a system which can guarantee confidentiality for all or they should defer plans to force online filing. It is extraordinary that MPs and others can enjoy higher security."

Mark Wallace, of the Taxpayers' Alliance, said: "This double standard is unacceptable. If the online system is not secure enough for MPs, why should ordinary taxpayers have to put up with it?"

The system was uncovered by the Tory MP Andrew Robathan, who received a letter saying he could not file online. He challenged ministers.

"Given our discussions on the efficiency of HMRC recently, how come I have also been sent a letter from HMRC saying I cannot file online?"

Jane Kennedy, a Treasury minister, told him: "There are categories of individual for whom security is a higher priority. Not just MPs - there are several categories - and HMRC does not have the facilities for them to file online."

In a statement to The Daily Telegraph, HMRC confirmed the policy. "HMRC online services are designed with security as an integral part of the service. We use leading technologies and encryption software to safeguard data and operate strict security standards.

"A tiny minority of individuals' records, including MPs, have extra security measures over and above the very high standards of confidentiality with which HMRC treats all taxpayers' data.

The extra security applies to those in the public eye. Their details are thought to be stored on a highly-restricted database with extra levels of security.

'The security of the online computer system used by more than three million people to file tax returns is in doubt after HM Revenue and Customs admitted it was not secure enough to be used by MPs, celebrities and the Royal Family.

Thousands of "high profile" people have been secretly barred from using the online tax return system amid concerns that their confidential details would be put at risk.'

I guess the common folk will have to keep using it.

I guess the common folk will have to keep using it.

Nobody has to use it. It's a voluntary alternative to paper returns, which most people still use.

“Nobody has to use it. It’s a voluntary alternative to paper returns, which most people still use.”

The article says: “From this year, anyone wishing to file a self-assessment tax return after October will have to do so online or face stiff penalties.”

The crucial phrase here is “after October” - i.e. late. As I understand it you will still be able to make paper returns up to the end of September (six months after the end of the tax year). There are undoubtedly going to be more and more incentives to use the online system, but I can’t see the Revenue depriving themselves of the easiest way of getting money from the significant minority of taxpayers who choose not to have a computer.

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