The report known as the Carter Review covering various aspects of HMRC's online services has been published alongside the Budget.  The Government has indicated that it accepts Lord Carter's recommendations and will put them into effect.  The measures include:

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Compulsory online filing of VAT returns, PAYE forms and company tax returns from April 2008.

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Compulsory electronic payments relating to the above.

Income tax self-assessment returns to be filed on paper by 31st October or online by

31st January.

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Computer generated paper 'substitute' returns no longer to be accepted from 2007/08.

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The twelve month enquiry window should be linked to the actual date of filing of the tax return rather than 31st January.