Does E-filing or similar functionality help eliminate errors?

Hopefully the answer is yes! We recently had a paper filed abbreviated set of accounts rejected by Companies House; a standard letter saying abbreviated accounts could not be filed. This was incorrect as it was 31 October 2016 accounts and abbreviated accounts were still permitted. These were subsequently filed electronically with no issue. Human error in first rejection - 1-0 to e-filing. 

I don’t know why they were filed on paper in the first instance though! The accounts software generates the required output file in the appropriate format and another piece of software files it online with Companies House – the only input required being the company authentication code. So much quicker…..and easier…..!

I had cause this week to examine sold old sets of accounts filed at Companies House-not by us I hasten to add. The client had managed to file them himself. These were some 8-10 years old, and it does make you wonder what sort of human or electronic checks, if any, were in place some years ago.

The 2006 accounts filed had a balance sheet that did not add up - £1200 cash shown and £1 share capital…and that was it. 2007 accounts had net assets of some £2 million pounds, in 2008 dormant company accounts were filed showing cash of £2 and shares of £2, with 2007 comparatives showing the same £2 figures – not the £2 million that was on the original filed ones. Goodness knows what was filed with HMRC!

E – filing generally does at least perform some basic validation checks before passing the files through the gateway e.g. filing tax returns with HMRC. These checks are in fact pretty rigorous. With the various issues for 2016/17 tax return filing and tax calculations, our tax software does have a “test in live” feature so that we can run validation checks and identify at an early stage those where manual paper filing may be needed.

It is still very frustrating after all these years that tax repayment claims cannot be filed online. I completed a claim form for my mother recently; she had £82.60 to come back- a very simple case with three pensions, but HMRC seem incapable of getting the codes right to avoid overpayments.  Not a huge amount , but as she says, “better in my pocket than theirs”. The tax claim form was printed and posted. Just a couple of days later she spoke to me and said HMRC had been very quick in dealing with the claim. It transpired she had been sent a calculation which showed £29.60 overpaid. It was actually dated several days before we had sent in our figures…and is wrong, as some taxable income with tax paid was missing! It is likely to take several weeks for the actual claim to be processed. She could go online to her personal tax account (aged 92 and no real idea what the internet is) and get her money back within days, or if she did not do so, it could take 2 months! Impressed ….or not? The E-filing and collation of information clearly has not worked in this case…..multiply this up by several hundred thousand people – some of which will have had more than their entitlement…….

There are still some very clunky HMRC systems around in other areas. Trying to register a partnership online with HMRC, register the partners and then apply for CIS registration has been dragging on for months. It is so disjointed.

What do you wish you could e-file?

Any areas where e-filing does not work?