TENS of thousands of people struggling to complete tax returns before the deadline last night face £100 late-payment fines — and £60-a-day penalties — because the Inland Revenue’s online system buckled under the weight of last-minute filers.

Taxpayers who tried to pay their bills over the internet at the weekend found that the Revenue’s online filing system would not let them log on and was unable to issue receipts.

The payment deadline passed at midnight and accountants feared that many taxpayers may incur hefty penalties, netting the Revenue an estimated £4 million.

Each year about 10 per cent of the 9.5 million people who must complete a self-assessment form misses the deadline, incurring a £100 fine. Interest is then levied at 7.5 per cent a year on the unpaid debt and surcharges are also imposed.

The Revenue uses various tools to tackle the widespread failure of so many to pay their personal taxes. It has issued 15,500 penalties of up to £60 a day to taxpayers who have failed to file returns on time.

The taxman must seek permission from the Revenue’s independent commissioners to demand daily penalties. The Revenue believes that levying daily penalties is an extremely powerful deterrent.

An official said: “The daily penalties are there for a specific purpose: to tackle those individuals who are persistent non-taxpayers.”

In addition to the daily fines, the taxman makes personal calls to hundreds of thousands of self-assessment payers to goad them into paying on time.

Stubborn non-payers may also find that they are more likely to be singled out for one of the 350,000 investigations carried out by the Revenue each year.

Internet-users keen to file on time this year reported continuing problems yesterday. Allan Edwards, a public relations consultant, had to print out paper tax returns and deliver them by hand to his local tax office yesterday.

“I tried to get on to the website on Sunday, but just couldn’t log on,” he said. Other self-assessment payers encountered similar difficulties.

Tax advisers nationwide reported tremendous problems with the online filing system over the weekend.

A Revenue official insisted that there was nothing wrong with the website. He said: “The site is running, it hasn’t been down at all. It is slightly slower because of the sheer volume of traffic.”

More than 700,000 people used the internet to pay their 2002-03 bills, compared with just 76,000 for the 2000-01 tax year. Last Thursday alone more than 34,000 people filed their returns over the internet.

Explore UK News

• Crime News

• Education News

• Health News

• Scotland News

Times Recommends

• Feeble wind farms fail to hit full power
• Students revolt as 150 are crammed into one tutorial
• Politics is off as Mumsnetters get raunchy