More than a million taxpayers who have failed to meet deadlines to send in self-assessment tax forms could face fines, according to the Institute of Chartered Accountants.

Self-assessment is the new system for assessing tax, which applies to everyone who gets tax returns. The main groups of people who are affected are self-employed people, company directors, business partners, trustees or personal representatives and people with complex tax affairs.

Two months before the final deadline, a survey for the institute has found that nearly a fifth of those who were originally sent forms have not completed them.

Under the rules of the self-assessment system, people who have not paid all due taxes within 28 days of the February 28 deadline will incur a 5% surcharge.

The 1.3 million people who have yet to complete their paperwork cite a number of reasons for the delay - the majority say they haven't got round to it, others say that they are having difficulties with filling in the detailed documents and are waiting for help.

Although the survey puts the number of incomplete forms at around two million, the Institute of Chartered Accountants believes that the figure is closer to three million.

The Inland Revenue has found serious errors or omissions in 300,000 of the tax returns that have been submitted and is sending them back with instructions to try again.

If the taxes are still outstanding by March 28, 1998, the surcharge can be doubled to 10% of the outstanding amount.

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