NEARLY one million taxpayers are expected to miss today’s deadline for filing their self-assessment returns, fuelling fears that the Inland Revenue will seek greater scope to crack down on late payers.

When the last envelopes have been handed in at more than 250 tax offices about one in ten of the 9.5 million people who are required to complete a self-assessment form will not have done so.

This figure has remained virtually unchanged for the past five years, despite a Revenue advertising campaign and the threat of fines and surcharges for those who fail to meet the deadline.

The National Audit Office is examining the problem of how taxpayers can be encouraged to file their returns on time and tax experts fear the Revenue may use its report, due to be published in the spring, to back demands for tougher measures.

Chas Roy-Chowdhury, head of tax at the Association of Chartered Certified Accountants (ACCA), said: “I think there is going to be pressure on the Revenue to use the £60 a day penalties more frequently. But I hope the Revenue will use carrots, as well as sticks, in their efforts to get people to file on time.”

There is already a triple dose of pain in store for those who fail to meet the January 31 deadline. Late payers face a fine of £100, interest charges of 7.5 per cent on any tax due and an increased risk of being singled out for one of the 350,000 investigations carried out each year by the Revenue. Persistent offenders could also be hit by additional £60-a-day penalties, while bills that remain unpaid by February 28 will attract a surcharge of 5 per cent.

John Whiting, a partner at PricewaterhouseCoopers, the accountant, said: “The Revenue has failed in its campaign to get people to file and pay on time. Each year 10 per cent of people miss the deadline despite all the Revenue’s warnings about the penalties that await them.

“People who don’t hand in the return on time may well find it too difficult to complete. It is time to put more effort into educating taxpayers rather than wielding the big stick.”

Meanwhile tax experts tried to put a figure on the amount the Revenue will collect from fines and interest payments on overdue tax. Mike Warburton, of Grant Thornton, the accountant, said: “The initial £100 fine for late filers will only apply to those who actually owe money to the taxman — an estimated 400,000 of the 900,000 people who miss the deadline. This will bring in about £40 million.

“Then there is interest of 7.5 per cent per annum on an estimated £800 million of unpaid tax. This will build up at a rate of about £1 million a week until the tax is paid off. Finally there are the fines of £60 a day which are likely to be imposed on about 400 offenders, which will bring in £24,000 a day.”