Contractors who fail to meet Jan 31 tax deadline may trigger inland revenue enquiry<br>

Inland Revenue admits late filing can be a prompt to investigate
Could lead to questions on IR35 employment status
Late filing can also lead to extensive fines
Contractors must remember to file their self-assessment tax returns by January 31 2003 or risk attracting an enquiry by the Inland Revenue warns contractor specialist giant.
The Inland Revenue recently admitted for the first time in a circular to accountants that the late filing of a self-assessment tax return is a prompt to launch an investigation into the individual involved.
Comments Matthew Brown, Managing Director of giant group: The pressure on contractors to ensure they meet this month's deadline is now greater than ever. It is essential that contractors act now or risk being unfairly targeted for a stressful and time-consuming enquiry.
If a tax return does attract an enquiry, rather than limiting its interest to the individual's self assessment tax affairs, the Revenue may also move the spotlight on to the contractor's IR35 employment status.
According to giant, contractors could also be subject to potentially extensive fines and interest charges for the late filing of their tax returns.
The Inland Revenue imposes an automatic 100 fine on anyone who misses the January 31 deadline. In addition, for continuing failure they can seek to charge up to 60 per day for a late self-assessment return.
According to the latest Inland Revenue Annual Report the income from these penalties for late filings jumped by 17% to 76.7m in 2002 from 65.7m in 2001.
Matthew Brown adds: Contractors should also be aware that a timely but inaccurate tax return could also trigger unwanted attention from the Revenue. Take care when using estimates, for example of business expenses; explain any large year on year changes in savings; include all income sources and most importantly check all your sums add up!