Every UK taxpayer possesses a Personal Tax Account (PTA), a crucial yet often overlooked resource. Despite being introduced by HMRC in 2015, only around 44% of the working population, approximately 15 million people as of July 2018, have embraced this digital tool.
Understanding Your Personal Tax Account (PTA)
The HMRC’s PTA is an integral part of their commitment to ‘making tax digital.’ This online account allows users to manage their tax payments similarly to online banking. It is open to anyone, provided their identification is successfully verified. For more details on the process, consult your Personal Tax Accountant.
Is Creating a Personal Tax Account Mandatory?
HMRC strongly recommends creating a personal tax account to gain better control over financial data. While it’s not compulsory, the advantages, such as streamlined processes and reduced reliance on paperwork, make it a wise choice.
The Importance of Checking Your Personal Tax Account
Surprisingly, up to 46% of UK workers have never checked their personal tax account, with 22% believing their income doesn’t warrant it. However, staying on top of your tax obligations is crucial. Here’s why:
Top Reasons to Check Your Personal Tax Account:
- Notify HMRC of address changes.
- Track letters and tax forms submitted online.
- File and monitor online self-assessment tax returns.
- Check income tax estimates for better spending planning.
- Apply for a Certificate of Residence in the UK.
- Monitor state pension status and National Insurance contributions.
- Report changes affecting child benefits.
- Manage tax-related forms submitted to HMRC.
- Set up tax credits.
- Explain discrepancies in PAYE coding notices.
Benefits of Your Personal Tax Account
The online personal tax account provides 24/7 access, offering features like checking PAYE tax codes, updating job perks, accurate recordkeeping, quick access to year-end income information, and real-time updates on tax-related matters.
Setting Up Your Personal Tax Account
To create your personal tax account, register online using your National Insurance number, recent payslip, most recent P60 or UK passport, mobile or landline number, and email address. Follow the guided steps on Government Gateway, confirming your identity through security questions.
Why Should the Self-Employed Set Up Their Personal Tax Account?
Self-employed individuals can use their personal tax account to determine their Individual Taxpayer Reference (UTR), challenge late filing penalties, submit self-evaluations, access HMRC Annual Tax Summaries, and ensure the security of their financial information.
Safety and Security Measures
HMRC ensures the security of personal tax accounts with unique user IDs and passwords. Users are advised to keep their credentials confidential and monitor their accounts regularly. Security features include displaying login times and automatic logout after 15 minutes of inactivity.
Help and Advice on Your Personal Tax Affairs
Working with an accountant can help individuals navigate personal tax liabilities, reduce errors in tax returns, and enhance financial predictability over time.
Frequently Asked Questions:
- How to open a personal tax account? Creating a personal tax account takes 10 to 20 minutes online, requiring necessary information and security procedures.
- How much does a personal tax accountant cost? Costs vary based on complexity, with simpler tax positions incurring lower fees.
- How to claim a tax refund on a personal tax account? Utilize the service within your personal tax account to claim a tax refund, searching for the appropriate form, such as P53Z.
- How to find a good personal tax accountant? Consider factors like reputation, client base, recommendations, and expertise in your business size and field.
Unlock the potential of your personal tax account today for seamless financial management and peace of mind.
