Revenue takes online self-assessment offline over security fears

The Inland Revenue has suspended its online self-assessment service after users reported they could see parts of completed forms submitted over the Internet by other people.

The Revenue received a number of calls from users who were able to access partially completed online returns and took the service offline to fix gaps in the site's security.

A spokeswoman for the Inland Revenue said: "About 10 people contacted us to say they had seen data relating to other people. When we learnt that we decided to temporarily withdraw the self-assessment online service and we are now working around the clock to get to the bottom of the problem."

The spokeswoman would not comment on whether the matter had been overlooked during the restructuring of the self-assessment website in April. Changes were made so users could find their way around the site more easily. It was also supposed to make the site work more quickly, calculate the total amount of tax payable and provide an on-screen acknowledgement that the Revenue had received the tax return.

Penny Hamilton, President of the Chartered Institute of Taxation, said: "Until this mess is sorted out, no one will have confidence in e-filing. Whilst we fully support the concept of e-filing, the implications must be fully thought through and the systems must be robust enough to cope. At the moment they clearly are not.

"This is even more serious because of the proposals in the Finance Bill for mandatory e-filing with penalties for non-compliance. The Revenue needs to get its act together before imposing this on the taxpaying public."

The Revenue's online self-assessment system is handled by the IT outsourcing giant, EDS, which has held a contract to maintain the department's IT infrastructure since 1994. The Revenue will shortly award a new contract for IT services worth £4 billion over ten years.

The prohibitive cost of the transition of the contract from one company to another led to Nick Montague, Chairman of the Revenue, announcing in March that the Government would cover transition costs for a successful bidder. The Revenue also said it was considering financial incentives to encourage fair competition to provide IT services at a cost of up to £10 million.