Select Committee on Treasury Minutes of Evidence


Examination of Witnesses (Questions 60 - 79)

WEDNESDAY 6 MARCH 2002

MR STEPHEN BANYARD, MR STEPHEN JONES, MR GORDON SMITH AND MR JOHN GILBODY

  60. It is not surprising people were turned off, if they had to do two things, with a wait in-between?
  (Mr Banyard) Indeed. We still had 75,000 people using this service, it is an online transaction service, it is the first online transaction service in Government. Obviously, we want more people to use it, and we are putting a lot of effort into meeting people's needs and meeting what they want us to do.

  61. What is the saving to you, if they file this way?
  (Mr Banyard) We estimate that if 50 per cent of our taxpayers submit in this way we will make savings of staff of about 1,300, and we would then be able either to take those as savings or to redeploy them to customer service and compliance.

  62. Would it not pay then to give some financial incentive to file by Internet?
  (Mr Banyard) We did use an incentive in the first year for Self-Assessment, we gave individuals a £10 incentive, and we gave a £50 incentive to employers to use the service. The customer research we did on the Self-Assessment population showed that the people we talked to who used the service said their priority was not for an incentive, they wanted a system that was easier to use, and we have put our effort into doing that.

Chairman

  63. Just on that, when you said you want more people to do it, what is the new target? You said you wanted more people to do it electronically, whether by Internet or by Lodgement; what is the new target?
  (Mr Banyard) We have not finalised our target for next year, but a conservative estimate would be that, as we nearly doubled our take-up this year, we would double it again next year. We are obviously working to do much better than that; for example, we have made it possible now for agents to come in, on the Internet, we are putting more pages, different situations, onto the form next year that is electronic. But a conservative target would be that we would double again and go to about 150,000.

Mr Beard

  64. It is still quite small, compared with the total number filing?
  (Mr Banyard) It is; but the experience elsewhere is that the take-up . . . This is a once-yearly service, and it is quite difficult to advertise it as `e'. We do think there are real benefits for people in using the e-service, and we think that the take-up will be higher than 150,000, we will certainly be putting our effort into pushing it up, but a conservative target is that we will get to 150,000.

Mr Cousins

  65. People have told me that the Electronic Lodgement Service, to which you have referred, is particularly prone to computer breakdown, error and general failure. What comment do you have about that?
  (Mr Banyard) I cannot answer that question at the moment, I am not equipped to answer that. I am told it is not subject to failure. I was not aware that it was, because the use of it has gone up 19 per cent this year.

  66. Could you give us some information on that, on the performance of the computer system?
  (Mr Banyard) We can do, but I am happy to let you have a note; but the information that I have been given is that it is actually quite reliable.[7]

  67. Good; well we can obviously check that out?
  (Mr Banyard) Yes.

Mr Ruffley

  68. One very quick question. You gave a figure for a £500 million saving over the lifetime of the project, which I think you clarified was over 15 years. What I am not clear about is what assumptions you are making about Lodgement filing and Internet filing in that cost-saving figure; because, can I just say, I am rather surprised you do not have any indicative numbers, 15 years out, as to the proportion of taxpayers filing through those two electronic means?
  (Mr Banyard) The Self-Assessment business case dates back to 1995, and it includes no allowance for Internet filing at all; so any savings that we take from electronic filing are on top of the Self-Assessment business then.

  69. But did you have any targets going 15 years out on the proportion of taxpayers who should be filing electronically? You say it is going to double this year and double the year after?
  (Mr Banyard) The targets we have for take-up are that we will have 50 per cent take-up of our services in 2005.

  Chairman: Right; now we must move on. Mr Mudie.

Mr Mudie

  70. Penalty notices. It is just a small matter, but the penalty notices issued in your report do not seem to bring the total up to the number of returns issued; in other words, if I add the number of returns sent out and I see the number come back and then I see the penalty notices, there is a considerable difference. Why is that?
  (Mr Banyard) There are a lot of cases where, when we look at them, a penalty is not due. I do not have them at my fingertips, but the figures you are looking at, I think, are the number of returns that have not come in by 31 January, and the number of penalties issued is fewer. There are good reasons for that, I have not got them at my fingertips.

  71. Can you suggest one?
  (Mr Banyard) I do not know whether anybody behind me has them.

  72. As I understand it, it is an automatic penalty if it is not in, but you can appeal against it; so why, when 10 per cent, which amounts to about 200,000 people, do not get it in, are they not issued with a penalty notice?
  (Mr Banyard) We cannot help you on that, at the moment. I remember discussing it and we can let you know.[8]

  73. That is fine. Who decides if the money is refunded, as a matter of fact?
  (Mr Banyard) It is decided according to rules laid down.

  74. Is it decided locally?
  (Mr Banyard) Some of the refund is calculated automatically. If, when you submit your return,—

  75. This is a business tax in excess of a penalty. I am just talking about who takes the decision to cancel a penalty notice; who takes that decision, is it taken locally?
  (Mr Banyard) It will be taken locally, in accordance with national procedures and guidelines.

  76. Do you have figures for each office?
  (Mr Banyard) Not with me, no.

  77. And what is the next stage; if I put a perfectly reasonable case and I get told "No," can I go any further, or is that the last decision?
  (Mr Banyard) The case you are considering is where somebody believes they have a reasonable excuse for a late submission of return and we have awarded a penalty.

  78. Well, you have awarded a penalty, I have argued against it and you have said "No"?
  (Mr Banyard) You have argued against it, yes.

  79. Who has got the last word, is it appealable?
  (Mr Smith) Yes.
  (Mr Banyard) You can appeal against a penalty notice, in which case you can take that appeal to the General Commissioners, who are an independent body of people who hear disputes on law between us and taxpayers.


7   See Ev 23, para 3. Back

8   See Ev 23, para 4. Back


 
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