Taxpayers get an extra 24 hours to file returns after 'overloaded' website crashes in rush to beat deadline

Tens of thousands of taxpayers discovered that the website of Her Majesty's Revenue and Customs had crashed.

It was another humiliation for the department and came on one of the busiest and most important days of the tax calendar.

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For several hours yesterday, the website was not working, infuriating those trying to meet the January 31 deadline and avoid a late payment fine of £100.

The failure forced HMRC to give a 24-hour reprieve. Taxpayers now have until midnight tonight to submit their return. In previous years, up to 150,000 have left it to the last minute to file.

Philip Hammond, Tory Treasury spokesman, said: "When will Alistair Darling get a grip?

"He is happy to threaten taxpayers with £100 fines if they don't send in their returns on time, but he can't even provide them with the basic tools to do the job. This is more evidence of the endemic incompetence at HMRC."

Accountants asked how it could be possible for a website to be unable to cope on such a predictably busy day.

John Whiting, a tax partner at the accountants PWC, said: "I know the Revenue could say people have had months to file their tax return. But the system is supposed to be there for them - and they should be able to depend on it."

In November, HMRC lost two computer discs containing the personal and banking details of 25million benefit claimants, exposing them all to the possibility of fraud or identity theft.

Introduced in 1997, self-assessment applies mainly to the self-employed, higher-rate taxpayers and those with complicated tax affairs.

Most of the 9.3million who have to complete a tax return repeatedly put off doing so, which is why January 31 is always so busy.

Matthew Elliott, chief executive of the TaxPayers' Alliance said: "This would be laughable if it wasn't so serious.

"HMRC have yet again let down the taxpaying public.

"The department is clearly in a state of absolute chaos. Unless the fundamental failings are sorted out immediately, it will continue to waste money and cause grief."

Liberal Democrat Treasury spokesman Vince Cable asked: "Why should anyone have any faith in HMRC?

"This is an institution which pays almost three million tax credit claims incorrectly each year, has lost 25million people's personal records, and now is apparently incapable of keeping its website up and running on the day tax returns are due."

Adam Hart-Davis, the historian who has appeared in TV and Press advertising for HMRC with the catchline: "Tax doesn't have to be taxing" said: "I'm entirely full of sympathy."

An HMRC spokesman said the department regretted the inconvenience caused by the website failure.

FamiliesS could be forced to pay an extra £360 a year in tax to close a widening gap in public finances, a think-tank said yesterday.

The Government will need to find £ 9billion to meet its budgetary targets, according to the National Institute of Economic and Social Research.

The independent think-tank warned, however, against a tax increase in the Budget scheduled for March 12.

Spokesman Ray Barrell said: "We must be careful not to tighten policy at exactly the wrong time.

"During the next five years there is a need for tightening taxes. But there is space to wait for a year."

The institute also warned of the prospect of a banking crisis that could scupper economic growth.

It predicted that house prices will rise by less than one per cent this year, compared with 11 per cent in 2007.

Philip Hammond, Tory Treasury spokesman, said any tax increases would punish families already hit by rising inflation and falling take-home pay.

He added: "Reckless borrowing has created a £9billion hole in the public finances. This report adds to the evidence of Gordon Brown's economic incompetence."

The Institute for Fiscal Studies warned yesterday of higher taxes and a deterioration in public finances.