Security breach on UK tax site halts online filing

The U.K. Inland Revenue (IR) shut down its Internet tax self-assessment service last Monday because of security breaches, the tax department said on Friday.

"Several people were using the self assessment online service over the weekend when they noticed the details of other filers and reported the problem to us. As a result, we temporarily shut down the system on Monday night and are now working around the clock to get to the bottom of the problem," an IR spokesman said.

The IR declined to give details of the personal data revealed, or how many people had confidential information made public. The government department was also unable to estimate how long it will take to repair the problem and get the service back online.

According to the IR, the security breach was in an electronic form used for filing taxes online.

"There are several commercial products that are available for filing taxes over the Internet, and we are still accepting those," the spokesman said.

The IR has a contract with IT services company Electronic Data Systems Corp. (EDS), valued at £2.4 billion (US$3.5 billion), but the form in question was created and administered by EDS subcontractor EzGov Inc., the IR spokesman said. This Atlanta company provides technology and services to governments.

"We are not looking to attach blame to anybody, we are just looking to fix the problem as soon as possible. Security is very important to us," the IR spokesman said.

Representatives from EDS and EzGov could not be immediately be reached for comment.

Last year in the U.K., 76,287 returns out of a total of just under 9 million were completed over the Internet, the IR said. The IR's self-assessment service accounted for 90 percent of the returns filed online, the spokesman said. So far this year, 10,928 citizens have used the IR online filing system, he said.

The U.K. government has been encouraging people to file their taxes online and IR recently sent out fliers in an attempt to allay public concerns over security issues and urging tax payers to switch over to the online system.

Chancellor Gordon Brown announced in April government plans for getting businesses and individuals to file tax returns online by 2010, which could possibly include imposing fines those who fail to use the Internet to file.

Accounting company Ernst & Young LLP conducted an internal review of the IR's online system soon after it went public about two years ago and determined that security issues kept Ernst & Young from recommending the system to its customers or using it themselves, Rayner Peett an Ernst & Young spokesman said Friday.

"Our review turned up a number of concerns about the IR's online filing system, including the flexibility of the system, but one of the main concerns was over security. Such a system has to be able to guarantee the absolute security of confidential information and we didn't feel the IR's system could do that. The government has encouraged people to file online and what we hope is that this breach in security will goad the government into doing whatever is necessary to assure the security and confidentiality that taxpayers require," Peett said.

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