NEARLY 900,000 people are facing fines for failing to submit their self-assessment tax returns in time.

The Inland Revenue said it had received 8.58 million completed forms by the January 31 deadline, from a total of 9.47 million sent out for the 2002/2003 tax year.

Those who failed to return their forms in time are liable for a £100 penalty charge, potentially raising up to £89m for the Inland Revenue.

They also have to pay interest charged at 6.5 per cent on any outstanding tax they have to pay, although the penalties they are charged cannot exceed the amount they owe.

Everybody who is sent a tax return has to complete it, even if they do not have any extra tax to pay.

Despite the high number of people who have failed to complete their returns on time, a Revenue spokesman said the figures were in line with last year, with about 90.6 per cent filing by the deadline.

He said: "It is about the same in terms of the percentage because there are more returns this year than in any previous year."

The Inland Revenue also has longer to open an investigation if people file their tax returns late.

For those who completed their return on time, the Revenue has 12 months from the January 31 deadline to start an investigation. For those who filed late, it has 12 months from the end of the quarter in which they filed, giving them 15 months to begin an investigation into the affairs of someone who filed on the first day of a new quarter.