The Inland Revenue has begun sending out its new simplified self-assessment tax returns more than one million tax-payers.

But the Association of Chartered Certified Accountants warns that the accompanying guidance notes may give a false impression of an individual's tax position - and could potentially leave them open to a tax investigation.

Whilst the Revenue has said that the form is only intended to give a "rough guide" to the tax due, ACCA is concerned that many people - particularly pensioners - could easily believe that they have an inflated tax liability.

This is because the guidance does not give details of the full personal tax allowances available.

Glenn Collins, ACCA head of business advisory, said: "Take, for example, a married couple over 75 with an income of £11,000. The guidance notes show that the tax due is £648.60. A person could easily worry that they owe this sum. However, the real amount owing is only £102.50 - tax due £648.60 less £572.50 (£5,725 personal allowance @ ten per cent)."

ACCA is also concerned that people receiving the shortened form will just assume this is correct.

In fact the Revenue has stated that it remains the taxpayer's responsibility to check their eligibility to complete the short return each year. And the individual must work out whether they have had any financial dealings which are outside its scope.

Mr Collins added: "Many people will be uncertain as to whether they should be completing the short form or the traditional 16 page return.

"Some may consider that - as this form appears easy to complete - they can dispense with the services of a qualified accountant. But this could be unwise given that the onus is on the taxpayer to assess whether they are filling in the right form in the first place.

"It should also be noted that unlike the traditional forms, the new shorter version cannot be filed on-line and indeed does not offer any scope for notes. In the past the Revenue has shown a preference for more information, rather than too little and we feel that this could result in it having to contact or even investigate some taxpayers."

The new four page returns for 2004/5 are being sent to taxpayers that the Revenue considers had simple affairs in 2003/4 - such as employees with modest income from cash savings and shares; selfemployed people with small businesses (turnover less that £15,000); pensioners; and owners of modest land and property interests. n Businesses in the Midlands are being urged to complete important forms this month or risk penalties.

Laurence Moore, a partner at Coventry certified chartered accountants and business advisors Pilley & Florsham, said the deadlines for forms such as Employers Annual Returns (P35), P11D and Form 42 were fast approaching.

"Employers only have a matter of days to get their P35s in before the deadline of May 19. Penalties range from £100 a month per 50 employees for late returns and up to £3,000 for forms incorrectly completed. Some companies are required to file their returns online and failure to use this method can also result in penalties."

P11D is required for employees receiving benefits such as company cars, while Form 42 discloses shares issued to employees. They have a deadline of July 6 and face fines for late forms.