Millions of people in the UK who have to fill in a tax return have just over a week to get their forms in by post if they want the taxman to calculate their tax liability for them.

About nine million people have to submit tax returns each year. Anyone who is self-employed, a higher-rate taxpayer or who receives untaxed income from more than one source should have received a tax return from HM Revenue and Customs for the tax year which ended on April 5 this year.

People who get their paper forms in by September 30 do not have to calculate exactly how much tax they owe because the Revenue will work it out for them. As September 30 falls on a Sunday this year, the Revenue says that any forms that arrive on the morning of October 1 will be treated as though they arrived the previous day. If it receives your paper return after this date and processes it by December 30, the Revenue will still calculate your tax, but it cannot guarantee to tell you what to pay by January 31, after which interest starts building on any tax you owe, at a rate of 8.5 per cent.

The September 30 deadline is also important for those who think that they will have only a small tax liability and want this to be paid through their tax code over the year.

Andy Hardy, development director at TaxCalc.com , a tax software company, says “If you owe more than £2,000 in tax, then you will have to pay this to the Revenue by January 31. However, if your tax bill is less than £2,000 and you file the paper return by September 30, you have the option to ask if the Revenue will collect the money through your PAYE tax code. This means that you will not have to come up with a lump sum by January 31, which many people find difficult. If you are filing online, you have until December 30 and can request that the tax you owe is collected though your PAYE code.”

However, if you are filing your tax return online and owe more tax than can be collected through PAYE, then you do not have to worry about the September 30 deadline at all. You can file online at any time until January 31 and the calculations will be done automatically.

If you do plan to file online, you must first register on the Revenue website at www.hmrc.gov.uk . You will then be allocated a personal identification number by post, which can take up to a week to arrive.

A Revenue spokesman says: “Last year about 2.9 million people filed their tax returns online and we had 150,000 submitted in the 24 hours up to midnight on January 31. Filing online is more straightforward and you know that the calculations will be done for you so that you can see immediately how much you owe.”

Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants (Acca) says: “The September deadline is one of the major tax hurdles of the tax year if you are filing a paper return and want your tax liability worked out for you. The crunch tax deadline, however, is the day for final filing – January 31. Failure to submit a tax return by this date means that penalties come into force.”

If you fail to submit your tax return by this date, you will be charged an automatic penalty of £100. From next year this deadline will be moved forward by three months, so that anyone sending in a paper return will have to get it in to the Revenue by October 31 or risk being fined. Taxpayers who file online will still have until January 31 to submit their returns.

More penalties arise if you fail to submit your completed forms by February 28. You will be charged an automatic 5 per cent surcharge on any tax due for the year 2006-07 that has not been paid in full by this date. If you still have not sent in your return by July 31, you will be charged a second automatic penalty of £100, plus a second surcharge of 5 per cent.

July 31 is also a key date for those who have to make “payments on account”. This is when the second instalment of any tax you owe is due. The first instalment is due by January 31.

Action plan

Make sure you have any interest certificates from banks or building societies, share dividend vouchers and any pension books.

You will need your P60 form, which all employees should have been given by their employer to show what they were paid last year, plus a P11D form, which shows any taxable benefits.

If you are self-employed, you will need your accounts.

If you are having problems, call the self-assessment helpline on 0800 9000444 or visit www.hmrc.gov.uk .

To find a local accountant who can help with your return, go to the Institute of Chartered Accountants’ website at www.icaew.co.uk .

CASE STUDY

MATTHEW WILDEMAN, of Poole, Dorset, has already filed his tax return online and found it much simpler than completing the paper version.

The 39-year-old, who runs a clothing company, Big Matt’s Menswear, with his partner, Nicky Baker, says: “I first started filing personal tax returns when I became a self-employed sailing instructor four years ago. I set up my menswear company a year ago and now have to file a partnership tax return as well as a personal return.

“This year I have completed both returns online with the help of TaxCalc.com, one of the Revenue’s filing partners. This enables you to use software that helps with the filing of the returns. I would definitely have ended up pulling out all my hair if I had to do it all on bits of paper.

“The software enables you to enter provisional figures until you get it right. It took me only a couple of hours to complete the returns.”

The TaxCalc.com software for individuals within a partnership costs £49.99.

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