The construction industry is unlikely to be ready for the introduction of mandatory online tax returns next year, according to a survey by the National Federation of Builders.

The Inland Revenue has stipulated that all tax and Construction Industry Scheme returns must be filed electronically by 2006, prompting concern over the industry’s lack of readiness.

The survey by the NFB shows that only 10% of firms make electronic returns.

The report accompanying the survey says that “payroll, Inland Revenue returns in general and the CIS scheme in particular are sources of activity and concern”.

It adds that: “The CIS scheme and its changing nature has presented challenges for software houses as they work hard to meet the Revenue’s requirements and deadlines.”

Small firms in particular are struggling with the demands, partly because of a lack of expertise.

The NFB survey, which covered all aspects of IT in construction, found that only 25% of respondents were able to take advantage of in-house IT courses, and 82% relied on self-help or advice from colleagues.

Training was considered one of the main obstacles to the use of IT, but less than 50% of respondents felt their IT training needs were being adequately met.

The report says more work is needed to raise awareness of the Inland Revenue’s deadlines, and to provide clear information and advice on possible solutions.

The NFB survey was backed by CITB-ConstructionSkills, the industry’s training body.