TAX experts in York today called for an investigation into why an increasing number of people fail to cope with the Inland Revenue's self-assessment system.

David Walker, president of the York Society of Chartered Accountants, said a study was needed to determine what was going wrong. With four million returns still outstanding, chartered accountants fear the January 31 deadline will be missed by more taxpayers than ever before, resulting in a record multi-million pound windfall of fines and surcharges for the Treasury. In the last three years, self-assessment penalties collected by the Inland Revenue have increased five-fold to more than £50 million.

"We are now in the fifth year of self-assessment, but the number of people who send in returns late, or not at all, is increasing, and we need to know why," said Mr Walker. "The system is very complex, which may be the reason many just don't or can't do it properly, but it's in everybody's interests that some attention is given to what's going wrong."

Taxpayers who do not use a professional adviser will now have to work out how much they owe, but, said Mr Walker, they could easily be baffled by the thick and complicated Tax Calculation Guide. About 1.5 million people in the region - mainly high earners and those who receive untaxed income - are required to submit self-assessment returns. Those who miss the January 31 deadline will incur an automatic fine of £100, and may have to pay interest on outstanding tax at the rate of 6.5 per cent until the debt is settled. In response to the growing problem of late filing, the Inland Revenue has introduced a system of "cold calling" by telephoning some taxpayers to remind them of the deadline.

The groups most likely to receive calls are those who filed late returns in previous years, people new to the system, and taxpayers in the Construction Industry Scheme.