IR23                               29 November 1994


          TAX RETURNS:  ELECTRONIC LODGEMENT SERVICE

The Chancellor proposes in his Budget to allow the electronic
submission of certain tax returns to the Inland Revenue following the
design and testing of a suitable computer system.

The Chancellor's intention is to assist the Inland Revenue's drive to
provide a more efficient and cost-effective service for taxpayers and
their representatives, through greater use of information technology.

                            DETAILS

1.   The electronic lodgement service will allow the information
required by a tax return to be sent electronically direct to the
Inland Revenue computer system.  As the lodgement involves no
physical transfer of paper from one location to another, sending a
return in this way will be much faster and more efficient.  It is
also intended to develop the system to allow for information to be
transmitted by the Inland Revenue to those filing returns
electronically.  In this way the service will ultimately provide
benefits to taxpayers, their agents and the Inland Revenue.

2.   A trial of the facility using corporation tax returns from
companies is currently under way, and will be evaluated in the Spring
of 1995.  If considered to be successful by those taking part, the
service will be made fully available for company tax returns towards
the end of 1995.  The system would be extended to the first tax
returns to be issued to individuals and others under Self Assessment
in April 1997.

3.   Draft clauses for publication in the 1995 Finance Bill are
attached.  Comments are invited, and should be sent by 10  January
1995 to -

               Mr J Marshall
               Room 432,
               22, Kingsway,
               London.  WC2B 6NR

                       NOTES FOR EDITORS

1.   An earlier Press Release issued on 17 February 1994 gave details
of the main features of the proposed service and the process of
consultation with software houses and accountants which is
continuing.

2.   Around one million corporation tax returns and nine million
income tax returns are issued in the United Kingdom annually.  It is
expected that only a relatively small proportion of these will be
made electronically initially but that, as in other countries where
electronic transmission of tax returns is already an established
feature, there will be a steady increase in numbers as the technology
becomes more widely available.


NOTE: DRAFT CLAUSES/SCHEDULES ARE ATTACHED TO THE PRINTED COPY 
OF THIS PRESS RELEASE