UK Customs acts while DTI ponders over Net security

The UK's Customs & Excise office has announced that the Internet is secure enough for online VAT services, despite the fact that the Department of Trade and Industry (DTI) has not yet finalised its Internet security regulations.

In a statement released this week, Customs said the Net is now private and secure enough to communicate tax information, thanks to encryption technologies and digital signatures.

But industry has not yet responded to the DTI's consultation paper on electronic commerce, which aims to set up a secure framework for trust services. Crucial issues, such as whether encryption keys will be stored with a third party, are still not resolved, as industry has until Easter to provide an alternative system.

A DTI spokeswoman was surprised at Customs' stance, but could give no official reaction at the time of publication. HM Customs, likewise, was unavailable for comment.

Chris Leather, senior consultant from IT management consultancy Consult Hyperion, told Silicon.com: "The plans announced by Customs to offer widespread electronic services over the Internet illustrate that it is not necessary for parties to use approved licensing schemes such as Trusted Third Party in order to provide legal and effective transactions.

"While we believe this is a welcome initiative, it would appear to contradict the DTI's assertion that uncertainties and limitations on electronic signatures and writing are important barriers to the development of ecommerce and electronic government."

A spokeswoman for HM Customs responded by qualifying the original statement: "Our news release just refers to a pilot scheme. We think Internet security is enough for a pilot, but obviously we are in communication with the DTI and we are staying aware of all the options."

HM Customs announced plans to set up a live pilot scheme this year for online VAT returns. In due course, this will include self assessment returns for individuals and end-of-year PAYE (pay-as-you-earn) returns for employers.