HM Customs & Excise & Inland Revenue CW 1

9 March 1999

NEW CHOICE FOR TAXPAYERS - RETURNS VIA THE INTERNET

Businesses and individual taxpayers will soon have the option of
sending tax information, such as VAT and Income Tax Returns, via the
Internet.

Legislation in the Finance Bill will allow Customs and Excise and the
Inland Revenue to develop new electronic services that taxpayers can
use as an alternative to the current legal requirement of paper
communication.

The Government is taking a leading role in encouraging enterprise in
electronic business and in the development of the infrastructure
needed to support viable Internet trading. The development of
Internet-based services will have efficiency benefits for small
businesses and will provide improved customer service for businesses
and individual taxpayers.

Customs and Excise plans for electronic VAT Returns are already well
advanced, with a live pilot during 1999-2000 and an expansion of the
service in 2000-01.

DETAILS

The Inland Revenue will be developing the new Internet-based services
alongside their existing electronic services (for example the
Electronic Lodgement Service, that is used by agents to file their
clients' Self Assessment Returns).  One of the first new services to
be offered will allow unrepresented taxpayers to file their own Self
Assessment Returns and this is likely to be available in 2000-01.

In due course further Internet services will be provided enabling,
for example: businesses to send their Insurance Premium Tax and
Landfill Tax Returns; employers to file their end of year PAYE
Returns; and businesses to apply for VAT registration.

For those businesses not already linked to the Internet but who wish
to use this method of transmission there will be a negligible cost
for Internet services.

NOTES FOR EDITORS

1. The Prime Minister has set a target that 25% of transactions with
government should be capable of being done electronically by 2002.

2. Customs and Excise and the Inland Revenue already provide a range
of computer services.  Examples include tax practitioners submitting
returns on behalf of their clients to the Inland Revenue, and
electronic transmission of import declarations to Customs and Excise.
But these more specialised services are only cost effective for those
in regular contact.

3. Both departments would like to develop Internet-based services
that are of direct benefit to the majority of taxpayers, whether
individual members of the public, small businesses or companies, who
only need to make contact occasionally, for example to deliver a
quarterly or annual Tax Return.

4. Until recently, the Internet was not regarded as sufficiently
private and secure for the communication of tax information, partly
because the information is transmitted over an open network and
partly because of the need to validate the identity of both recipient
and sender. This is no longer the case as encryption is available to
secure the information being transmitted, and encrypted digital
signatures can authenticate that information.

5. The new services will be significant milestones in the development
of electronic communication between government departments and the
public.

6. Details for businesses are published in Budget Notice 12/99 which
is available from Customs and Excise Business Advice Centres and from
the Customs and Excise Internet site.

Press Enquiries to HM Customs & Excise, Public Relations Office, New
King's Beam House, 22 Upper Ground, London SE1 9PJ. Telephone: 0171
865 5468/5471/5472

Press Enquiries to Inland Revenue
Telephone: 0171 438 6692/6706/7327/7356

Non-media Enquiries to Inland Revenue
Telephone: 0171 438 6420/6425

Others should contact their local VAT Business Advice Centre, listed
under Customs & Excise in the telephone book.

Customs & Excise Internet address:
http://www.hmce.gov.uk

Inland Revenue Internet address:
http://www.inlandrevenue.gov.uk

This news release can also be found at:
http://www.hm-treasury.gov.uk

Other Treasury material can also be found at this address.

# = pounds sterling