The Inland Revenue's online tax return service is doomed to failure without significant improvements in security and reliability, MPs have warned.

A report by the Commons Public Accounts Committee into the electronic self-assessment service said a 50 per cent take-up target was unlikely to be met.

The Inland Revenue has vowed to offer all its services on the web by 2005 as part of the Labour administration's commitment to e-government.

But the programme has run into problems, including security breaches and technical glitches.

Public confidence has fallen so much the service has attracted fewer than 80,000 users, less than one per cent of total taxpayers.

The Revenue was criticised for not having a full grip of the costs and potential benefits of its £200 million e-strategy.

The committee called for a rigorous assessment of cost-effectiveness.

It said re-assurances should be given about security.

Earlier this year, the service was suspended following a security breach in which an individual's details were accessed by other taxpayers.

The committee said future systems needed to be more rigorously tested.

This should include consultation with users.

Committee chairman Edward Leigh said: "There are not enough clear benefits at present for taxpayers to submit their returns electronically.

Potential users will not be encouraged to make the switch in the light of the well-publicised initial difficulties and concerns over system security.

"The Revenue must make progress in developing properly-piloted and tested e-services which taxpayers can use easily and in whose security they will feel fully confident."

www.inlandrevenue.gov.uk
www.parliament.uk/commons/selcom/pachome.htm