The new HMRC personal tax accounts are here. The idea is that they will eventually replace the annual Self Assessment tax return system.
According to HMRC the system will be similar to online banking and will let UK tax payers see their personal information and make payments at any time during the tax year.
The main aim is that by 2020 the new tax accounts will be used by all tax payers both corporate and individual.
“The launch of personal tax accounts is a groundbreaking development for HMRC and our customers,” said Ruth Owen, the director general of personal tax at HMRC.
“Remember when you started banking online? Well, this is the equivalent shift in service for the majority of our customers wanting to do business with us online.”
When will I get a personal tax account?
Everyone will have an account by April 2016 which includes small businesses. The roll-out for individuals is being phased in, for people currently in the self-assessment system.
What’s the point of the personal tax acocunt?
One of the main benefits is that tax can be paid at any time meaning it will stop the build up of tax being owed, often resulting in a nasty shock for the individual or business.
What do I have to do?
It depends, from the April 2018 all businesses including the self-employed (where the activity is their main source of income) will have to update HMRC every quarter.
In addition, if you have secondary source of income including pension of more than £10,000 you will need to report on the same basis.
Personal tax account conclusion
In time it seems the Self Assessment tax return system will gradually cease.
“Self-assessment for individuals and small businesses (including companies) will work through digital tax accounts, so there will be no need for them to send in annual tax returns,” an HMRC spokesperson explained.
“Obligations on customers, such as to inform HMRC of taxable income or to provide information relating to that income, will not change where HMRC does not have the data from another source.
“Taxpayers will still have to confirm their information is correct and make sure the right tax is paid,” he added.
You can find out more from the BBC here.
