The 31 January tax deadline for online self-assessment forms is only weeks away and, according to research by Unbiased.co.uk, taxpayers are set to be charged an unnecessary £503 million this year in fines generated by late returns, miscalculations and surcharges on unpaid tax. The research also reveals that this amount has increased by £24 million on estimations for last year.

Failure to get forms to Her Majesty’s Revenue & Customs (HMRC) by the fast-approaching deadline will incur an initial £100 late payment charge. If the form still hasn’t been returned by 31st July, there will be a further penalty of £100. If, despite those penalties, you still fail to return your tax forms the HMRC may apply a daily penalty of up to £60.

In certain cases HMRC will waive these penalties: If you have a “reasonable excuse” for missing the deadline, such as serious illness or a close family death for example.

To avoid unnecessary charges, businesses must act quickly to make sure their online tax returns are in on time.

For first-time self-assessment filer’s, or those new to using the online system, registration is required at HMRC’s self-assessment online service, at www.hmrc.gov.uk/sa. Registering is straightforward; simply click ‘Register for Self Assessment Online’. Once registered, an activation code will be issued in the post – this may take up to seven days, so businesses must register this week to ensure codes are received on time.

There are real benefits to filling your tax return online: Your tax is calculated automatically and is processed faster, so any money your owed is repaid more quickly. If you file online, you’ll get an immediate on-screen acknowledgement that the return’s been received – receipts are not provided for paper returns.

HMRC’s Sarah Walker said:

“The 31 January filing deadline is just around the corner, so if you haven’t yet sent in your 2008-09 tax return, you need to take action now. Don’t risk a penalty – make sure you file your return online and on time.”

And don’t forget, 31 January 2010 is also the deadline for paying any tax you owe for the 2008/09 tax-year.

Help is available from the HMRC website at www.hmrc.gov.uk/sa.