As this year's self assessment looms - January 31 - with the taxman set to get tough on late payers.

Research has revealed UK taxpayers will gift more than £365 million to the Chancellor of the Exchequer in fines this year as a result of late or miscalculated returns.

The startling findings from IFA Promotion emphasise the difficulties taxpayers face.

Since the first self-assessment tax return was issued in April 1997, there has been a steady rise in the number of late returns, with 808,000 deadline defaulters last year alone.

Despite the option of filling in the form online and having your tax liability calculated for you, more than four million people missed the September 30 deadline and although three-quarters of a million taxpayers took action since September, a staggering 82 per cent still have to submit their forms with only two weeks to go.

David Elms, IFA Promotion's chief executive, said: "For those who missed the September deadline, the onus has been on them to ensure their forms are completed correctly and on time, or face substantial fines."

Its research suggests that money will be wasted as follows:

£264 million through fines for miscalculations on tax forms; £81 million in fines for forms returned past the January 31 deadline;

£20 million incurred in surcharges and additional penalties for outstanding tax payments of more than £1,000.

If you do not follow the rules you may have to pay:

£100 penalty if the Self
Assessment Tax Return is not submitted by January 31.

Further £100 penalty if
it's not submitted by July 31.

If the Self Assessment
Tax Return is not submitted by January 31, 2004, the Revenue can impose a penalty of up to 100 per cent of the tax due.

A surcharge of five per
cent of the tax liability will apply on any amount not paid by February 28.

A further five per cent
surcharge applies if the tax is still not paid by July 31.

Interest is payable where
the tax due is paid late.

Interest is also payable
on penalties paid late.