Self-assessment simplified

Tax returns will be made simpler and the deadline will be pushed back in a major revamp of self-assessment.

The new forms, sent out by Her Majesty's Revenue and Customs (HMRC), will have fewer questions, simpler language and a new layout. The deadline for paper forms will be 31 October 2008, instead of 30 September, but people who file online will have until 31 January 2009.

Every year 9.3 million people have to complete the self-assessment tax returns, and every year 10 per cent fail to do so and are fined £100.

HMRC said the new simpler system was aimed particularly at "those who are self-employed or who don't use an accountant to complete their return".

The new paper form will be sent to people who have not filed online before, or who do not qualify for the short version introduced in 2005 for those with simple financial affairs. The main source of income will now have to be declared at the start of the form instead of the end, and there will be a new self-employment section.

The revamp follows a two-year pilot trial.