HMRC are encouraging individuals to sign up for a personal tax account as a way of getting greater transparency and control over tax records.
The personal tax accounts are part of HMRC’s move towards digital services and offer a single place to access key tax affairs affecting you. With your account you can:
- check your Income Tax estimate and tax code
- fill in, send and view a personal tax return
- claim a tax refund
- check and manage your tax credits
- check your State Pension
- track tax forms that you’ve submitted online
- check or update your Marriage Allowance
- tell HMRC about a change of address
- check or update benefits you get from work, for example company car details and medical insurance
You can create a new account through the GOV.uk website. You will need to prove your identity to do this, but you can also sign in with your self-assessment user ID or other account if you have proved your identity through a service such as Barclays, CitizenSafe, DigiIdentity, Experian, Post Office, Royal Mail or SecureIdentity.
By some estimates 6.7 million people paid the wrong amount of tax last year because they were on the wrong tax code. You can use your personal tax account to check the tax code HMRC has for you, and how much you are paying.
This is particularly important for those working for several employers or working whie drawing a pension since you will have more than one tax code and your personal allowance of £11,850 may be used across multiple incomes. You can use the account to provide updates to your income figures if there are any errors, as well as other details.
The online service includes a breakdown of your tax code along with details of amounts taxed. You can also find information about what your tax code means on GOV.uk. A tax code will consist of numbers and letters, in a format like 1185L. The numbers relate to how much tax-free income you get and the letters refer to your personal situation. For example, 1185L means you get the full personal allowance of £11,850 for the year.
With the nature of work and retirement changing for so many people, it seems likely that a personal tax account can help you manage your tax affairs. Please get in touch if you have any questions, or are concerned HMRC might have inaccurate information.