HM Revenue & Customs is to begin sending out penalty letters to the half a million people who have not sent in their 2010/11 tax returns.
However, the amount of outstanding returns has almost halved, down to 5.9% from 10.7% the previous year.
The department will issue fines of £1,200 to those who have not filed despite several reminders to do so.
Find out more about the penalties on TaxAssist Accountants.