HMRC intends that every UK taxpayer has their own digital tax account which “allows you to manage your tax affairs online, quickly and simply, whenever you want”. All of your tax information will be altogether in one safe space and it will simplify many of the paper-based systems. The government aims to have this fully up and running by 2020.
So, why should I bother doing it now?
We think that there are several benefits to getting ahead of the game with this free service.
- Your personal tax account just contains information that is relevant to you. You won’t have to read through every HMRC rule to find out what is applicable to you.
- It can help you work out if you are owed a tax rebate and how to claim back any tax you have overpaid.
- Tax experts predict that it should mean quicker response times from HMRC because the information systems are more efficient. Hopefully, this means a much shorter wait for your tax rebate cheque.
- Having all of your personal information in one accessible place means that you will have a clearer picture of your tax position. Knowledge is power and, in this case, more accurate command of your finances.
Is it safe?
Online security is of paramount importance to HMRC. They have layers of security protecting these Personal Tax Accounts including data encryption, firewall and multi-step login procedures. Your identity is confirmed by going through your existing Government Gateway Account. There is also an inbuilt 15 minute logout if your account is not being used.
You are the only person that can enter your Personal Tax Account with your unique login details. HMRC’s security systems will flag any dubious, failed attempts to enter your account. If you log in to your account and something doesn’t look right, then you should contact HMRC as a matter of urgency. For example, the date and time stamp of your last visit to your account will be shown whenever you log in. If this wasn’t you, you need to consider this as a security breach.
But security is not just up to HMRC…
Obviously, you also have a responsibility to keep your Personal Tax Account details secure. Do not share your user name or password with anyone and, if you have to keep the information written down, make sure it is stored somewhere secure. As ever, criminal minds will already be thinking up new ways to scam taxpayers using this system.
Never give any details about your Personal Tax Account by phone, text or email – they are not real HMRC communications. It is very helpful to those tracking these con artists if you report any attempted scams, even if you didn’t engage with them. It builds up local and national data that can eventually be used during prosecutions.
How useful is a Personal Tax Account?
This is a fair question, especially as you will have to go through the setting up procedure and then have another username and password to remember. Here is a list of the things you can do using your Personal Tax Account, that otherwise would involve either official paperwork or a long wait in the HMRC phone queue:
- Track online forms you have sent to HMRC
- Sort out tax credits
- Monitor your State Pension situation
- Tell HMRC of a change of address
- Check your tax code and P800 forms to make sure you aren’t paying too much tax
- Online self assessment tax return filing
- Work benefits check
- Tighter budget control by being able to see your predicted income tax amount
- Retrieve a misplaced Unique Tax Reference (UTR) number
- Organise Marriage Allowance
This is just the start for Personal Tax Accounts. The government’s drive to ‘make tax digital’ will aims to gets as many elements of our tax system as possible online.
What is the sign up procedure for a Personal Tax Account?
In order to set up a Personal Tax Account, you need to go through your existing Government Gateway Account. So, if you haven’t got one of those, you need to start here.
Information you need to have to hand:
- Email address for communications with your Personal Tax Account
- Landline or mobile number (for verification part of the security system)
- Current UK passport or recent P60 certificate
- National Insurance number
- Recent payslip
Once you’ve got all this information together, log in to your Government Gateway account, select ‘Personal Tax Account’ and choose whether you are an agent, organisation or individual. In this instance ‘agent’ means a financial representative, not a spy.
There are four steps which are all clearly explained and easy to follow. They simply require you to enter the information you have gathered beside you. All of this information confirms that you are really you. As an extra security measure, you will be sent a 6-digit code to your phone the first time you sign in to your account. Subsequent visits will just need your user name and password, so note them down somewhere and store this accordingly.
When you have completed this relatively simple process, you will immediately have full access to your Personal Tax Account. You do not have to wait for anything to arrive in the post.
Can my accountant access my Personal Tax Account?
No one can access your Personal Tax Account except you. You should not give the username and password details to your accountant so they can access your Personal Tax Account independently. This would be very insecure security protocol. You can extract any specific information that your accountant needs from your Personal Tax Account and send it to them. This could be posted as a print out of a particular section of your information, or emailed as a screenshot.
Alternatively, you can simply read out the relevant figures over the phone while you have your Personal Tax Account open in front of you. It is really useful for your financial expert to know that you have easy access to all of your details online and can speed up the information exchange. But you should not divulge the particulars of your login details.
