Money Talk: Return of the taxman

IT REALLY is crunch time for taxpayers who have yet to fill in or send back their self-assessment tax returns. Two-and-a-half million returns are still outstanding with the end-of-month deadline (next Saturday) less than a week away.

The expectation is that there will be a last-minute rush to avoid the threatened pounds 100 fine for missing the deadline. But the sheer number of people yet to send in their returns also suggests there is a significant hard core whom the taxman's ads andreminders have failed to spur into action, and will probably still fail to do so.

There are suggestions thatthere will be an extension of the deadline for filing - which the Revenue is not directly denying - but taxpayers who delay further should realise the risks.

Whether, like me, you are only just getting round to filing or if you are one of those organised people who filed months ago, it is important to remember that Saturday is also the main deadline for paying tax owed from these returns. Tax unpaid by this date will start clocking up interest at an equivalent annual rate of 9.5 per cent, with a one-off surcharge of 5 per cent of any tax outstanding at the end of February. So even if you are filing your return now and want to avoid paying interest, you should pay what you think you owe.

Everyone who may owe tax should by now have received a bill or blank payslip for this tax, says the Revenue. Failing that, it says people who think they have tax to pay should send a cheque, along with details of their name, address and tax return reference number, to their tax office in time for the deadline. For those who don't trust the post or fear they are running late, local tax offices with inquiry centres will accept hand deliveries, even as late as this coming Saturday.

SELF-ASSESSMENT tax payments will clear many people out this month, but I am also pleased to report that some of my positive predictions for the New Year have already proved correct. Even with another quarter-point base rate rise in February looking less rather than more likely, savings accounts that beat existing "best buys" continue to be launched. Last week it was the turn of Safeway, the supermarket. Its Direct Savings account, which is telephone-operated and requires no notice for withdrawals, pays 7.4 per cent on pounds 2,500 and is also a best buy for balances of pounds 1,000 and pounds 500. Expect further jockeying for position as such new-style accounts become more mainstream.

It is also gratifying to see the launch of another credit card that offers something to the half of all cardholders who pay off their bills in full each month. The new card, from Birmingham Midshires, the building society in the process of selling out to Royal Bank of Scotland, gives cash rebates - rather than points towards toasters and the like - according to how much you spend.

The rebates are worth only 0.33 per cent of a holder's first pounds 3,000 of spending - pounds 10 to someone spending this much a year. But with the card having no annual fee and a normal interest-free period, for people who pay off their bills in full it is at least money for nothing.

Alliance & Leicester offers a similar card with a more attractive cashback structure, while others, such as the BG-backed Goldfish and those issued by the big supermarkets, give discounts against subsequent spending. Competition is still most intense for the more lucrative customers who pay interest on their credit cards. But there's probably room for further initiatives that benefit the rest of us too.