The Inland Revenue has suspended its online tax filing system after a possible security lapse.

The Self Assessment Online service for UK taxpayers was suspended on Monday after users reported seeing snippets of information about other taxpayers, an Inland Revenue spokeswoman said.

The online service will remain out of use until technical staff have completed an investigation.

Self Assessment Online was used by about 75,000 people to file their tax returns last year.

Liberal Democrat Treasury spokesman Matthew Taylor condemned the breakdown.

"Yet again the Inland Revenue's online tax return system has failed to work - and this time it is breaking taxpayer's confidentiality in the process.

"The huge investment the Inland Revenue have made in this system has been a failure from start to finish and they need to look at how it is they spent so much on such an inadequate system."

Privacy fears

"The security of our customers' data is of paramount importance to us," the Inland Revenue spokeswoman said.

"A very small number of people told us that they had seen data relating to other people. When we learnt that we decided to temporarily withdraw the Self Assessment Online service and we are now working around the clock to get to the bottom of the problem." she said.

The security breach could set back government attempts to persuade more people to file tax returns online.

Earlier this month, it emerged that the government was considering imposing fines on companies and individuals who fail to file tax returns online by 2010.

Concerns over privacy and security are a major obstacle to wider use of the internet for shopping and administrative tasks such as filing tax returns.

Two years ago, several online banks were forced to suspend operations temporarily after it emerged that online users were able to access the bank details of other customers.