MORE than one million Hong Kong taxpayers should be receiving their annual assessment over the next few weeks. The good news is that most will be the beneficiaries of the wide-ranging tax cuts programme announced by the Financial Secretary in last month's Budget. One in four taxpayers will also not have to worry about the painful annual ritual, following the decision to raise the basic personal allowance from $56,000 to $72,000, or 28.6 per cent - nearly three times the rate of inflation. Those that still fall into the tax net include about 1.8 million employees, sole proprietors of businesses and others receiving income from renting properties. There is no need to panic yet about filing salaries because the deadline is May 31. Coopers and Lybrand tax partner Nick Hammans recommends that taxpayers consider all their options early and give themselves plenty of time to plan their tax affairs. Mr Hammans said: ''Failure to file salaries tax returns on time may result in penalties and the overpayment of taxes. ''The Inland Revenue Department has the power to impose a fine of $5,000 and an additional fine of treble the tax outstanding. The most likely course of action is the issue of a notice of estimated assessment, where the department estimates your taxablesalary income for the year and a fixed-rate fine. ''In addition, the department's actions will not relieve the taxpayer of the obligation to file the required salaries tax return.'' Mr Hammans has provided eight tips to help ease the pain. Salaries tax is only paid on your employment income. Investment income such as dividends and interest should not be included. Those who have paid tax on overseas earnings could be exempt from Hong Kong tax on that income. ''This is quite common for employees carrying out their employment duties in the Peoples' Republic of China where they are also subject to its tax,'' Mr Hammans said. Those who have been seconded to Hong Kong but who remain employed by a company based outside the territory may be eligible for special consideration. Mr Hammans said this was a complex area and expert guidance might be necessary. Those receiving accommodation allowances as a fringe benefit are eligible for concessional tax treatment, while a cash allowance is taxed in full. Education allowances are taxable in full. The exercise of an option granted under an employee share scheme may also result in taxable income. Holiday warrants or passage payments are exempt from salaries tax. Donations of more than $100 to approved charities are deductible. ''Be careful; the requirements for claiming tax deductions against salary income are quite stringent,'' Mr Hammans said. Those with doubts should contact their local tax office or seek an expert opinion. The Hong Kong Society of Accountants is offering free advice on legal ways of minimising your tax bill. It is willing to help individuals and companies estimate their liabilities and identify their exemptions. Those seeking information can pick up an application form from the public inquiry centres of the Inland Revenue district offices or from the society's office in Wan Chai. The society will be able to handle only the cases of a lucky few, so for the vast majority it will be a case of either paying for advice or struggling through the paperwork. There is no restriction on who may apply.