Security concerns forced the Inland Revenue to suspend plans to communicate with millions of taxpayers by e-mail.The department fears that hackers could intercept e-mails by pretending to be the Revenue's chairman.

The department has already installed 55,000 computers at a cost of £200 million, in order to set up its national e-mail service. It aimed “to provide an e-mail facility for customers to contact the Revenue office by 2002.” However, it has reportedly revealed in an internal publication concerns that hackers could intercept e-mails by pretending to be Sir Nicholas Montagu, the Revenue’s chairman.

A trial involving 300 employees from 10 offices found that serious issues regarding the security of confidential information still need to be addressed before taxpayers can exchange e-mails with the Revenue, Computer Weekly reported.

A spokesman for the Revenue said:

“This was a trial involving 300 staff. That pilot has now come to an end. The point of it was to identify and iron-out any problems. We will now analyse the results of the pilot before deciding how to proceed.”

A month ago, the Inland Revenue had to suspend an on-line self-assessment service that allowed taxpayers to file returns. Users had found that they could access other taxpayers’ data on the Revenue’s site.

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