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Personal tax accounts unveiled

By Ken Maggs, Moore Thompson

 

HM Revenue & Customs (HMRC) has gone live with its new system of personal tax accounts ahead of the 31 December deadline of self-assessment filing, in a bid to make the department one of the most digitally advanced tax administrations in the world.

According to the department, the move will mean that UK taxpayers can manage their tax affairs online, as the online personal tax account (PTA) aims to provide a “joined-up view” of taxes and benefits.

By 2020, the new digital accounts will encompass all taxpayers, whether individual or corporate, and from April 2018, businesses, including the self-employed and landlords, will have to update HMRC every quarter if this activity is their main source of income. The obligation to report quarterly will also apply where the money is a secondary source of income worth more than £10,000, and the main income is from employment or from a pension.

Meanwhile, in the ‘back office’, the department will bring together all the information it holds on a taxpayer into one system, including data from employers, banks, building societies and other government departments. This will eventually lead to the demise of the annual tax return for most taxpayers and so the current system of self-assessment, introduced in 1996 and now largely online, will wither away.

As a spokesman for the department pointed out, because self-assessment for individuals and small firms will work through digital tax accounts, there will be no need for them to send in annual tax returns.

However, the obligation for taxpayers to inform the department of taxable income or to provide information relating to that income will not change, where HMRC does not have the data from another source. As the spokesman said, they will still have to confirm their information is correct and make sure that the right tax is paid.

 

 

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