Time to pay your tax

Fill in the form by 31 January and save yourself £100

You have been putting it off for months. The dusty envelope that arrived from the Inland Revenue last April finally needs your attention - if you want to avoid a fine.

Inside that envelope is a self-assessment form.

Self-assessment affects 9.5m taxpayers with more complicated tax affairs. The main groups of people it applies to are:

• self-employed people
• company directors, employees or pensioners with complex tax affairs
• business partners
• trustees or personal representatives

The initial 30 September deadline may have passed, but there is still time to act before the final deadline of 31 January 2001.

Unfortunately, because you missed the September deadline, you will now need to calculate yourself how much tax to pay the Inland Revenue.

How to file

You can do this by filling in your self-assessment form and sending it back in the post - or by filing your tax return over the internet.

If you file online, you will need to register on the Inland Revenue website at least a week before the deadline. The Inland Revenue is offering a £10 incentive for anyone using this method.

Important tax documents

Interest statements from banks and building societies

P60 form from work

P11d if you have work benefits

Accounts if you are a freelancer or self-employed

P45 Part 1A if you have changed jobs

(If you had filled in your form before the end of September, those nice people at the Inland Revenue would have calculated your tax return for you.)

How to pay your tax

At the same time as sending in your completed tax form, you will also need to pay any tax owed. You can pay cash over the counter at your local tax office, or by Giro at a post office or bank.

If you send payment in the post, pay by cheque made out to the "Inland Revenue only" with your account number in brackets. You account number will be the 10-digit number at the top of your form plus the letter "k".

Ignore Hector the taxman at your peril

If you file online, you can pay electronically using your debit card.

Remember to leave enough time for any payments to clear before the deadline.

Deadline penalties

If you miss the January deadline, you will have to pay a fine of £100. Similarly, if you are late paying any tax owed, you will be charged 8.5% interest from 1 February.

If you still have not paid your tax by 28 February, you will have to pay a further 5% of what you owe.

With less than a month to go, it's worth starting to gather receipts and to collect the documents you will need.

Five "easy steps"

The Inland Revenue website refers to "easy steps to make a start on filling in your tax return". Here are five of them that apply to you:

• Check you've got all the pages you need by filling in page two of your tax return. If you need extra pages, call the self-assessment orderline on 0845 9000 404.
• Get all your tax records together, such as bank and building society interest statements, business earnings, expenses, or accounts if you are self-employed.
  If you're on pay-as-you-earn (PAYE) you will probably get a P60 and possibly a copy of form P11D from your employer.
  If you have changed jobs, you should have a P45 Part 1A.
• Fill in the tax return by following the guidance notes in the "Tax Return Guide".
• If you need help, contact the self-assessment team at your local tax office (the telephone number is on the top of your form). When the office is closed, call the self-assessment helpline on 0845 9000 444.
• Check your tax return once you've completed it, making sure you have added your signature.
  Finally post it back before 31 January.

Filing online

If you are technically minded, you could go to the Inland Revenue's website at www.inlandrevenue.gov.uk to file your tax return. The advantages to this are that the software will automatically calculate your tax bill using the information you plug in.

To file online, you will need a browser capable of supporting 128 bit encryption, such as Netscape 4.72, Internet Explorer 4, or higher versions.

Internet checklist

A browser capable of supporting 128 bit encryption

"TaxSaver 2000 Lite" software

iFile programme

You will also need "TaxSaver 2000 Lite" software, which incorporates the main tax return and the most frequently used supplementary pages, and an iFile programme to send the form electronically.

This software and the iFile programme are available on a CD Rom from the Inland Revenue, or they can be downloaded from the website.

Once you have filled out your tax return, you will need to close it down before logging onto the iFile programme to send the form electronically.

However, it is worth noting that to use the internet service you must register soon. First you need to register online for a User ID. This will come through the post within seven days of registration. You will only be able to send your tax form online if you have a User ID.

Also there have been problems in the past with software blips, but the Inland Revenue is confident that it will cope with demand, according to a spokeswoman. And if it's any comfort, the Revenue is expecting a lot of online tax filings this month.

Get in quickly and you should leave yourself enough time to sort out any problems. And don't forget that Hector the taxman is always there to help out if you need him.