Read the small print to avoid a large tax fine

More than 2.5 million people are expected to file their 2001/02 tax returns by the end of the month; another 800,000 or so are likely to be fined up to £100 for failing to meet the 31 January deadline.

All of the 9.3 million people who got a 2001/02 tax return are under a legal obligation to complete it and send it back. The only exception are victims of administrative blunders; those who got two tax returns, for instance. And if you miss the January deadline, you will clock up other hefty penalties - another £100 if you do not file by the end of July, for example.

Those with children under the age of 16 at the start of the 2001/02 tax year may be able to get up to £520 off their tax bill by ticking the boxes (under Q16) for Children's Tax Credit. Tax spe cialist (and father) Richard Murphy believes that many other parents are in danger of missing this: 'A lot of people seem to think it does not apply to them.'

They may, understandably, be confused by the publicity surrounding the Child Tax Credit which starts from April this year; not realising that they may have been eligible for the Children's Tax Credit which applies to 2001/02 and 2002/03. Some higher-rate taxpayers will even be eligible. Ring the helpline if you want more information: 0845 300 3900. Another area which has changed is the abolition of the old 'carry forward' rules on payments into personal pensions. The rules - due to change radically next year as a result of December's pensions green paper - have been simplified and made less advanta geous. But you can still make a pensions payment during this month and elect to have it backdated to the 2001/02 tax year as if you had paid it then.

'But you have to make the payment by 31 January and to have done it by the time you have filed your tax return,' warns Sylvia Kalisch, tax adviser at European Media Ventures.

Many people will end up kicking themselves because they got the complicated parts right on the tax return but still ended up with a £100 fine by doing something silly. 'The most important thing to do is sign the form,' says Richard Murphy. If it is unsigned, it will be returned to you - and this process could take you past the deadline.

Another simple tip is to make sure you keep a photocopy. Some returns have gone astray this year in Inland Revenue offices and taxpayers have had to submit a new return. If the Revenue challenges your return - as it does each year with thousands of taxpayers - you need to have a copy to give a sensible answer. But you can also use the 2001/02 return as a very useful starting point for 2002/03.

And if your income fig ures vary significantly from one year to another, you could save yourself a lot of trouble by giving an explanation in one of the white boxes on the return, rather than letting the Revenue take the initiative - a far more painful process.

In the run-up to 31 January, many local tax offices will be extending their opening hours. 'Some offices will open until 8 in the evening,' says Revenue spokesman Aidan Close. But it is a regional decision, so you need to contact your local office to find out.

Revenue staff can be extremely helpful. They will not construct a return from a bundle of invoices for you but they will often go through it page by page with you.

Many people needlessly clock up fines. For example, the 400,000 who missed last year's January deadline but got the form back in the following few weeks. Most will have paid the full £100 although some will have been fined less (because your fine cannot amount to more than the tax you owe).

Having held many a trembling hand over the years, Kalisch understands the problems: 'Some people are scared and put their heads in the sand. Other people can't be bothered unless they have a deadline. They see the end of September as a soft deadline [the date by which you file your return if you want the Revenue to do the calculations on tax due].

But the worst thing you can do is ignore the Revenue. If you have problems, speak to them.

People can end up with the bailiffs coming round when they might really be owed money since all the demands have been based on estimates.'