Tax deadline extended

THE Inland Revenue has taken the rare decision to give some people an extra two weeks to file their self-assessment tax returns.

A technical glitch at the weekend meant the Revenue's website failed to instantly send email warnings when forms were not accepted. Most arrived yesterday, not giving people enough time to re-enter the information before the midnight deadline.

The Revenue has granted a 14-day extension although it was unable to say how many people would be affected.

Yesterday, the Revenue faced demands to extend its deadline for all after its website nearly ground to a halt due to a surge in traffic. Failure to meet the 31 January deadline leaves them open to a fine of at least £100.

More than 9m self-employed or higher-rate taxpayers were expected to return self-assessment forms for the tax year ending April 5, 2004. It is estimated that close to 1m people will have missed the deadline, resulting in a penalties for each of £100, plus 7.5% annual interest on any tax owed.

After a further 28 days, a surcharge of 5% is imposed on those who still have not sent their self-assessment forms and paid their bill to the Inland Revenue.

They will be liable to a second £100 fine if they have not submitted their returns by 31 July. Persistent offenders can even face a £60 a day fine.

Around 900,000 were hit with penalties last year. Accountants will be closely watching for a large rise on that figure this year.

John Whiting, personal tax partner at accountants PWC, called the Revenue's decision a 'welcome and sensible concession'. But he added: 'The Revenue has encouraged people to file online, they've advertised it heavily and they should have expected a last minute rush.

'Perhaps it's been a victim of its own success but it was entirely predictable. People could beforgiven for feeling miffed if when they go to use the service it doesn't work properly for them.'

A Revenue spokesman said the deadline extension only applied to people who did not receive an instant failure message at the weekend. Others, including those who were hampered by the slow-running website yesterday, will incur penalties.

The Revenue has stressed that people have had since April to complete their forms. But the spokesman added: 'The appeals process on penalties is open to anyone.'