HMRC have committed to upending the tax system in order to make it more “real-time”, streamlined and digitized. Jesse Norman, the Financial Secretary to the Treasury, addressed this in a recent HMRC stakeholder conference.
As he said in late April: “Well, of course, tax reporting will become increasingly real-time.
“It may well make sense, although this is a complex and tricky area, to bring tax payments further into line with that, so that taxpayers have a single and, as far as possible, a complete financial picture of their tax situation.
“Of course, there may also be end-of-year adjustments – I’m not downplaying the seriousness, in accordance with that issue – but that’s the goal.
“But it’s not just about systems, it’s about the everyday business of making tax easier to calculate and easier to understand. And of course there will remain a very wide range of people with an infinitely different array of circumstances.
These comments were reflected on by the Association of Taxation Technicians (ATT) who noted Personal Tax Accounts, which provide singular access to tax affairs, can give many benefits.
PTAs were launched in 2015 and HMRC reported over 14 million people accessed their account over the last six years, with 2020/21 seeing a 21 percent increase in PTA sessions compared to last year.
On this, ATT urged those who have yet to set up an account to do so as they can provide many benefits.
This can include making state pension planning more simpler.
Complete your tax return
Pensioners are not the only people who may benefit from a PTA, as self-employed workers could see benefits.
As ATT detailed: “If you have self-employment or rental income, you can complete your tax return online through the PTA.
“It is easy to monitor your progress and, when complete, you can see your tax calculation, how much you have to pay and when.
“It is also easy to update your return and claim reductions in payments on account if your circumstances have changed and your income has fallen.”
Report a change in circumstances for tax credits and checking PAYE details
Those with certain employment tasks or benefit commitments can also benefit, as ATT concluded: “For those within tax credits, it is possible to report changes of circumstances quickly and easily to HMRC through the PTA to ensure that you receive the correct amount of tax credits and do not end up running up over or underpayments as your circumstances change.
“For those with employment income, you can use the PTA to check the details of your employment(s), pension(s) and other income information which HMRC hold and correct anything that is wrong. It is also possible to view details of how your tax code has been worked out. You can also claim tax relief for home working, which will be relevant for a lot more people as a result of the pandemic.”
Jeremy Coker, the President of ATT, commented on this analysis: “We urge anyone who is yet to sign up for their Personal Tax Account to do so and explore how it can help them to understand and manage their tax affairs better. Although we have only set out five reasons, there are a lot of other very helpful functions in this useful service. I particularly like that you can track the progress of any claims that you have made.
“For those who can engage digitally with HMRC, it is potentially a much quicker route to get an answer about tax than queuing on a helpline.”