And if you're going to do so, it pays to get your skates on. Here's what you need to know.
The deadline for paper tax returns passed on 31 October 2012 for the tax year 2011-12, but taxpayers who need to file a self-assessment return can still file online up to the end of January.
There is now a £100 fixed penalty for submitting your tax return late, even if you have no additional tax to pay. Previously the fine was cancelled if no tax was unpaid at 31st January.
If the return is more than three months late there is a £10 daily charge for up to 90 days – so fail to file until the end of July and you'll be fined £1,000 (£100 original fine + £900 daily charges).
The subsequent, further fixed penalties have been replaced by a sliding scale starting at £300, depending on the tax owed and the length of delay before payment is made.
After six months, a further penalty of 5% of the tax due or £300, whichever is greater, is levied and after 12 months, another 5% or £300 charge, whichever is greater. In serious cases, the penalty after 12 months can be up to 100% of the tax due.
There are also additional interest penalties for paying tax late: 5% of the tax unpaid at 30 days, six months and 12 months.
A payment on account (POA) may also be due on 31 January 2012. POAs are payments made by the taxpayer in advance to cover their tax liability for next year and are payable in January and July.
They are designed to ease cashflow and each of them is typically half of the previous year's tax liability – although they can be reduced if you are earning less than previous years.
Make sure you don't leave it to the last minute to complete your online return, especially if you're filing online for the first time.
The HM Revenue & Customs (HMRC)
online system is designed to speed things up and make it easier for people to submit their tax return, but to do so you need a user ID and an activation PIN. You can apply for these online. To do so you'll need your 10-digit reference number, found on any tax statement, plus your national insurance number.
Once you've registered, the ID and PIN are then sent to you in the post and could take up a week to arrive – that's why it's important to register as soon as possible if you want to be sure of getting your tax return filed by the 31 January deadline.
When you get the code you need to log in and activate your account. You only have 28 days to do this before the code expires and you have to apply for another one.
Even if you've used the online system before it's best to get your return completed as soon as possible as HMRC's website always gets busy close to the deadline.
What you need
To make sure you fill in the form correctly it's important to have all the information you need to hand. This will include details of all income earned in the tax year April 2011-12 including self-employed earnings, income from investments and savings, rental income and capital gains.
You'll also need your P60 and P11D documents, any interest statements from your bank or building society, and information on dividends from shares as well as details of your deductions including Gift Aid and pension contributions.
If you're self-employed and work from home you can claim towards heating, lighting and cleaning as well as other expenses necessary to run your business. Keep receipts for anything you are claiming.
Alternatively, you may authorise an accountant to deal with your affairs on your behalf. By authorising an accountant, they will be able to file your tax return online if they are registered as a tax agent with HMRC. If you want to use this option, you should contact an accountant sooner rather than later.