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Personal Tax Account – how HMRC’s new system benefits you

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You might not have heard of the Personal Tax Account. It’s HMRC’s version of Making Tax Digital for individuals, which shows your personal tax details and allows you to manage many of them online.

More than 16m people have already set up a Personal Tax Account (PTA), which enables instant access to your personal tax data. You should join them, the benefits are well worth it.

Once signed up for your account you can do a wide range of things including:

• File a self-assessment tax return (although we’ll still do that for you if it’s a service you pay us for)
• Change your address
• Check your tax code
• Access your state pension and National Insurance records
• Manage tax credits and Child Benefit payments

It’s all part of the government’s move to get as many individuals and businesses managing things online, making their job easier and more efficient. HMRC says more services will be added in future.

Benefits of the Personal Tax Account for employees

The benefits could be substantial, especially for employees who can check that HMRC holds the right real-time information about their earnings and can ask for any errors to be amended.

Within the PAYE section employees can see whether HMRC estimates of their income are reasonable. This is important, because in 2017 HMRC introduced in-year coding which means that instead of waiting for an annual tax code notice, they make changes to an individual’s tax code within the tax year based on certain triggers.

If the estimate of your income which your tax code is based on is inaccurate, you could end up paying the wrong amount of tax, leaving you either out of pocket, or with a tax bill that needs paying.

Personal Tax Account – using it to check your future pension

Once signed up for the PTA you should check your NI contributions to make sure everything looks as it should. Look especially for any years where contributions are missing or look quite different to the years either side.

It’s better to identify any discrepancies now than end up with a lower state pension than you anticipated when you want to retire.

The Personal Tax Account means many simple queries can be resolved online, which will save you the joy of listening to many, many minutes of HMRC hold music in an attempt to speak to someone on the phone.

While we have access on behalf of our clients as your agents, we think it’s really important you sign up to access all of the benefits of the Personal Tax Account.

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