Personal tax account, a new tool created by HMRC.
Personal tax account is one of the new tools that HMRC is using to apply to make tax digital for Individuals.
HMRC are investing so much on technology and innovation and they launched out using dynamic coding for PAYE(pay as you earn).
This means they use the information that is provided by the employers and taxpayers to make changes to tax codes and information they have on you.
It also gives you a picture from time to time what details HMRC has on taxpayers and when it’s updated by the employer.
Some of the importance of Personal tax account and dynamic coding.
The main concern is that Dynamic coding used by HMRC is built around estimated pay. Due to the fact that human circumstances change all the time, these can be flawed at times, therefore, the taxpayer paying more tax.
The HMRC calculates the personal allowance, tax codes, benefits, the sources of employment and tax paid based on these estimations.
Personal tax account homepage on HMRC website.
The main pages look just like below:
- It shows you full name
- It has links to your PAYE information.
- Links to your self-assessment accounts or Links to VAT account(if applicable).
- Its shows all your incomes sources and the one they use as your primary source of income, how your much tax you paid and how it was estimated.
- Understanding your tax code, explaining the tax code that was applied and to which employment, This is important for people that have more than 2 sources of income as they could be paying too much tax because their personal allowance is being applied to the employment that they receive less income from, thereby paying too much tax by not utilizing their personal allowance properly in the tax year.
- Your national insurance-Information on your national insurance contributions.
- Links to update your personal details like updating address
- If you receive the Tax credit, child benefits or marriage allowance( you can check if you are entitled to marriage allowance).
How to set up your personal tax accounts.
To set up your personal tax account the following steps can be taken.
- Go to https://www.gov.uk/personal-tax-account.
- To sign in for the first time you would need a Government Gateway account.
- You would also need your national insurance number.
Do you have a Gateway? if no follow this steps
- Click on a government Gateway account link (in blue).
- Enter your full name, email address and create a password.
- Take note of your user ID(preferably print)and continue
- Every time you sign in HMRC would need HMRC user ID, password, and unique 6 digit access code. ( you can either set that up with the phone call, text message or HMRC app for tablets or tablet).
- Input the code.
- To confirm your identity you would input your details (name, national insurance number, and date of Birth).
- You either use your UK passport or P60 to identify yourself.
- For example let say you used your P60, Questions such as your total pay on P60 could be asked, national insurance contribution, etc.
- You would be asked to verify your email.
- And then you get in your personal account.
Other reasons to consider setting up a personal tax account.
Furthermore, The personal tax account enables taxpayers to be able to have access to real-time information held by HMRC. Every time they need information, rather than needing the services of a professional, they could easily obtain the information by signing into their account.
In conclusion, if you would need support to set up one or need more tax advisory. Kindly fill our contact form and we would be happy to support you.