The new online system used by employers to send Pay-As-You-Earn information to the Inland Revenue has not been properly tested and will not be able to cope with demand, IT experts have warned.
With the May deadline for sending end-of-year employee pay and tax details fast approaching, the Business Application Software Developers Association (Basda) has warned that there will be “major problems” with online PAYE filing.
Dennis Keeling, chief executive at Basda, said three-quarters of the body’s 250 members believed the Inland Revenue had not tested the system rigourously enough. He said software firms have not been able to send dummy transactions through the Government Gateway – a portal that gives access to online government services.
“We have warned the Inland Revenue that the Gateway will not be able to handle the demand for online PAYE returns,” Keeling told Personnel Today’s sister publication Computer Weekly. “We believe there will be major problems. Companies leave filing to the last minute to make sure that do not make any mistakes.”
A spokesman for the Inland Revenue said: “We have a comprehensive testing plan for our online filing channels, as well as for the IT which will support the new regime for employers.”
Initially, the electronic filing of PAYE will only be compulsory for large employers, although the Inland Revenue plans to extend it to firms of all sizes by 2010.
Employers who have less than 50 employees can get up to 825 tax-free over five years if they file their 2004-05 tax returns electronically.
A spokesman for the Inland Revenue said: “We have a comprehensive testing plan for our online filing channels, as well as for the IT which will support the new regime for employers. We have been working with software suppliers to help them make sure that their products meet the needs of that new regime.”
The Inland Revenue has already experience problems with technology this year, when its online self-assessment systems struggled to cope with a last minute rush of taxpayers filing returns before the 31 January. Some people were locked out of the system for several hours.