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Last Updated: Friday, 22 September 2006, 08:36 GMT 09:36 UK
Tax-assessment deadline looming
Man working at his home computer
Filling in tax forms on the HMRC web site has become very popular
Self-assessment taxpayers who send in forms by hand or mail have until 30 September to file returns if they want the Revenue & Customs to do their sums.

Get the returns in before the end of the month and Revenue & Customs (HMRC) will calculate the amount of tax owed.

However, the growing number of people who file their returns electronically via the HMRC website have more time, and have a 30 December deadline.

More than nine million people have been sent income tax forms this year.

Once the returns have come in, taxpayers will have until 31 January to pay the money they owe to HMRC.

If the tax owed is less than 2,000 then the HMRC will try to collect it automatically by changing the taxpayer's tax code for the forthcoming tax year.

The September and December deadlines only relate to those people who want the HMRC to calculate their tax.

Should a person in the self-assessment system have an accountant, or be confident in doing the maths themselves, then the final deadline for getting the forms in and paying any tax owed is at the end of January.

If taxpayers' forms have not been submitted by then, either manually or electronically, there is an automatic fine of 100.

And if it turns out that there is still tax to pay then interest and surcharges start to be levied until the outstanding sum is paid.

Online filing

Although the system of self-assessment in now in its tenth year this is only the fourth year that HMRC has let people submit their income tax details via its official website.

HMRC said: "When you file your tax return online you get an immediate acknowledgement and, if HMRC owe you money, a faster repayment than if your return is sent on paper."

When it first started, the web site was plagued with technical problems and in the first year only 30,000 returns were submitted this way.

But last year, with the problems largely ironed out, two million people used the site to fill in and submit their forms.

John Whiting, a senior tax partner at accountants Price Waterhouse Coopers said self assessment was now a good system.

"I think the system has got steadily better and more efficient - the website is working much better now as well," he said.

Late payers

The system of self assessment is aimed largely at the self employed who are not covered by the standard PAYE system for collecting income tax.

But it also targets those who may have income that is not taxed at source and people such as company directors, business partners, those with income from letting property or who have complex financial affairs, such as income from abroad.

Last year only about half the people who were sent self assessment forms returned them by the September deadline.

More worryingly, about one million then failed to return forms - paper or electronic - by the end of January, thus incurring fines and penalties.

As well as receiving a fine for not getting a form in on time, if anyone fails to pay the required tax by 1 February then interest will start to be levied on the unpaid sum.

And if the tax is still unpaid a month later, by the end of February, a further 5% fine will be imposed.


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