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Monday, 16 July, 2001, 08:34 GMT 09:34 UK
Inland Revenue admits problems
The Inland Revenue must get 100% of its services online by 2005
The Inland Revenue publicly admitted that there had been problems with its e-filing system

By BBC News Online's personal finance reporter Sarah Toyne

The Inland Revenue is to enlist the help of community groups as part of its charm offensive to win over wary users, such as pensioners and low-income families eligible for tax credits.

This can be seen as an admission by the Revenue that it cannot reassure these users on its own.

It has also admitted it has had problems persuading customers to use its fledgling online service, despite having invested 20m in the service.

It is to launch partnerships with community groups, such as citizens advice organisations and pensioners charities, and sign contracts with commercial companies to make its services more attractive to ordinary members of the public.

On Friday, it revealed that so far this tax year only 17,953 people had registered at the site to file online - about 11,000 of those people have now filed their return over the internet.

Most of them don't want to deal with us

Inland Revenue

While the Revenue said that the figures were encouraging, they still only account for a fraction of the four million individuals who must complete their self-assessment forms.

Transferring self-assessment online has so far cost 20m of tax payers money.

Last year, the online filing service was beset with problems. It took up to two hours to download self assessment forms from the website. The Revenue was then forced to send people who had registered a free CD-Rom.

Terry Hawes, director of the Revenue's e-services programme said that the Revenue had a "willingness to learn from some of those things that were not as good as we hoped last year".

About 920,000 people failed to file their last tax return by the final deadline of 31 January this year.

Take up of government tax credits, such as the Working Families Tax Credit and Minimum Income Guarantee (Mig) for pensioners are also under target.

Experts say that people are simply boycotting the system because of its complexity.

The Revenue admitted on Friday that many of the groups that it was seeking to attract through tax credits did not want to deal with it.

An Inland Revenue source admitted that this was because "most of them don't want to deal with us."

The Inland Revenue is launching its new advertising campaign on Monday
Hector, the friendly tax inspector, was dropped by the Revenue

The government department watchdog the National Audit Office is expected to publish its assessment of the Revenue's online filing services within one month.

Customer friendly

The Revenue recently appointed Ian Schoolar from NatWest as its first ever marketing director, charged with making the Revenue appear more customer friendly.

On Monday, Dawn Primarolo, the paymaster general, will launch a new advertising campaign for self assessment.

Since New Labour came into power in 1997, the Revenue has taken on new roles.

The Department of Social Security now the Department of Work and Pensions has had many of its powers transferred to the Revenue, as benefits have been replaced by a series of credits - administered through the tax system.

See also:

14 Jun 01 | Business
Inland Revenue image: Your views
18 Aug 00 | Business
Inland Revenue web fiasco
07 Feb 01 | Business
Tardy taxpayers face 92m fines
10 Jul 01 | Business
Revenue targets small firms
15 Jul 01 | Business
'Mrs Doyle' is the new Hector
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