Income Tax returns may be filed on-line or on paper. There are significant differences between paper and on-line filing. Key issues are:

1. You must register in advance to use the on-line system. You will be sent an activation code through the post, so allow for possible delays
2. You can file your return later if you file on-line. Paper returns must be in by 31 October following the end of the tax year. On-line returns may be submitted three months later – by 31 January. Eg the tax return to 5 April 2011 is due by 31 October 2011 on paper, and by 31 January 2012 if submitted on-line
3. The on-line system gives an immediate acknowledgement that the tax return has been received by HMRC. No submission receipts are given by HMRC for paper returns.  This means that if you send in a paper return and it is lost, you may find it difficult to prove that you submitted it

Some pages are not currently available on-line via the HMRC’s free software (eg Ministers of Religion, Non-resident pages and Trust income).  You will also need commercial software to submit a partnership tax return on-line.

There is more to on-line filing than just submitting a tax return. Once you are registered for self-assessment on line, you can:

• check your account details at any time to see what tax is due
• make amendments to your return on-line
• easily save an electronic copy of your return, or print a copy for your records

You will have your tax calculated automatically and will receive repayments faster than if you submit a paper return.

For more information, see the HMRC website at http://www.hmrc.gov.uk/sa/understand-online.htm