Pictured above: Steven Holden

People who miss the fast-approaching tax return deadline of 31st January will face a 'spiral of tax problems' according to a leading Midlands-based tax expert.

The warning comes from Steven Holden, Tax and Trust Manager at MFG Solicitors, as thousands of people across the region prepare to complete their self-assessment forms - with online filing the only option to those who missed October's paper closing date.

"Whilst countless people are aware of the looming 31st January deadline on the tax calendar, there are still many who are unprepared, said Mr Holden. "Missing the cut-off date could have serious consequences as not only will people receive an automatic penalty of £100, but they run the risk of incurring additional surcharges, arrears and interest payments.

"Therefore I cannot stress enough how crucial it is for people to straighten out their paperwork over the next few weeks and submit their tax return."

Online tax returns must reach HMRC by midnight on 31st January 2011. If HMRC receives a tax return after this date, there will be an automatic £100 penalty. Amazingly, it is expected that the taxman may be gifted an unnecessary £503m this year in fines generated by late returns.

Mr Holden added: "Tax deadlines have been tightened over the past few years but if people set aside the time to untangle their web of paperwork, then many will breathe easier in the coming weeks. I would not want to see anyone in the region put into an unnecessary situation by missing the self assessment deadline. It's a headache people can avoid by planning ahead.

"As a firm we feel it's vital to offer advice at this critical time and help ensure people don't face a spiral of tax problems. It's important that someone is out there loudly ringing the final warning bell to people across the Midlands."