Newsletter Spring 2016

Personal Tax Accounts

In December 2015, HMRC launched the Personal Tax Account (PTA). This is an early step in the long path the government has embarked upon in its Making Tax Digital project.

A PTA will, by 2020, allow taxpayers to 'see their complete financial picture in their digital account, just like they do in their online banking'. One of HMRC's more controversial ideas in getting to this objective will be the requirement for most businesses and landlords to submit quarterly data to HMRC through their PTAs. We are a long way from that development. What is currently being trialled is the creation of an overview of an individual's taxable income and tax liabilities which is populated from information HMRC already has obtained from the individual and other sources (such as their employer). The expectation is that all personal taxpayers will have a PTA by April 2016, along with five million small businesses.

The PTA currently allows certain changes to be made by the individual so that HMRC can make changes to the amount of tax collected. The type of changes that can be made will be developed over time. Examples of changes that can be made currently include:

  • Employees being able to provide information about changes to a company car or to medical insurance benefits.
  • Individuals stopping Child Benefit payments if they or their partners are affected by the High Income Child Benefit Charge.

In the first example, employers do provide this information to HMRC but in arrear of the changes. The PTA therefore provides an opportunity for the employee to effect quicker changes to tax liabilities.

In the latter example, an individual can currently provide information via a secure form on the HMRC website. The expectation is that individuals will be required, in due course, to use the PTA.

If you are interested in seeing your PTA, you will initially need to establish your identity. There are various ways in which you can do this and the methods will be amended over time. A government gateway account can be used if you have one. Alternatively the GOV.UK Verify service can be used.

Please note that, at the moment, you do not have to access your PTA and, if we are your tax agents, we cannot currently access the account on your behalf. We will continue to manage your tax affairs and will keep you informed of developments in the Making Tax Digital project.