Don't skate on thin ice

Time's almost up for your self-assessment tax return.

For those who have yet to fill in a self-assessment tax return for the year 2001-02, the deadline is looming. Last year around one in 10 taxpayers who should have submitted a return failed to do so by 31 January, incurring penalties and, in some cases, interest and surcharges.

For those who have yet to fill in a self-assessment tax return for the year 2001-02, the deadline is looming. Last year around one in 10 taxpayers who should have submitted a return failed to do so by 31 January, incurring penalties and, in some cases, interest and surcharges.

Many employees don't have to file a return because everything they owe has already been deducted from their pay. But others are obliged to file, including the self-employed and those with capital gains or income not taxed at source.

If you submitted a paper copy of the tax form last year, you should already have received a return for 2001-02. However, those who filed electronically last year will be expected to do the same again. If you have not received a paper copy, contact a tax office immediately.

Once you have the form, work out what paperwork you need to fill it in. While the super-efficient will have filed away all relevant documents during the year in an easy-to-find format, most of us are likely to have the information scattered around the house, and crucial items may be missing. This is why you need to look at the form as early as possible to give yourself enough time to find all the necessary paperwork.

The information you have to give on the form depends on your sources of income and any allowable expenses incurred. For example, if you are an employee, you need details of pay and any benefits in kind received during the year, which your employer should have provided on forms P60 and P11D respectively. If you are self-employed, you need income and expenditure figures for the relevant accounting period.

Those with savings income need details of bank and building society interest and a breakdown of any dividends received during the year. If you have rental income, capital gains or other sources of income, you must provide this information. You should have received the appropriate supplementary sheets with your tax return, but if the source of income is new, you have to request these from the Inland Revenue.

The tax form has become much clearer in the past few years, with detailed guidance notes explaining what each box requires. If you have internet access, additional information is available on the Revenue's website. But if your tax affairs are more complicated, there is still time – just about – to find a qualified tax adviser to do the work for you.

The Revenue also offers a self-assess- ment helpline service (see below), while local tax offices provide a more personal service during normal working hours.

Some people may genuinely be unable to collect all the necessary information to complete the return. In such cases, you can use a provisional or estimated figure, which is preferable to returning the form late. However, you must notify the Revenue that you have not used final figures and explain why. For example, you may not know what was originally paid for shares that have been sold. You should also give a reasonable date by which you will provide the correct figures.

Once you have completed the form, return it at the latest by midnight on Friday 31 January. Delivery can be by post, by hand to your local tax office (in which case, seek a date stamp on a copy letter as evidence of delivery) or dropped in a Revenue mailbox at that office. Be careful if you are running late, as the boxes aren't always open outside office hours.

If you file online using either the Revenue's own or other authorised software, do not leave this until the last minute as you must be authorised to do so – a process that can take several days.

If you miss the deadline, you incur an automatic £100 penalty. This will be reduced if it is shown on submission of your return that you owe less than this. Penalties, interest and surcharges arise the longer the return remains outstanding.

If you are concerned about the amount of tax you owe, the best course is to submit the return and then seek to arrange a payment schedule with the tax office. An ostrich-like approach will not help.

Contact: www.inlandrevenue.gov.uk . The self-assessment helpline is on 0845 900 0444, open evenings and weekends.

Francesca Lagerberg is national tax director at Smith & Williamson, the independent professional and financial services group. Contact: 020 7637 5377 or www.smith.williamson.co.uk