Personal Tax Accounts were launched in December 2015 and 5 million people now have one.
It gives tax payers the flexibility to access HMRC’s services at a time that suits them as the service is available 24 hours a day, 7 days a week.
Services are always being added to the PTA but those already live include:
- receiving an estimate on your Income Tax and tax code
- filing a Self Assessment tax return
- claiming a tax refund directly into your bank account and receiving it within 3-5 working days – removing the need to wait for a cheque or Payable Order
- checking and managing your tax credits, including the ability to change your circumstances throughout the year
- checking your State Pension
- checking or updating your Marriage Allowance
- checking or updating benefits you get from work, such as company car details and medical insurance
The PTA is radically changing the way that customers contact HMRC and the effects of this have already been felt. Almost 1 million customers renewed their tax credits claim ahead of the 31 July deadline this year, representing a move away from the old paper and telephone methods of renewal. Over 600,000 people have already received their Income Tax refund directly to their bank account without having to wait for a cheque in the post as before. And more than 100,000 people have checked their company car status details and updated them accordingly.
The Personal Tax Account is a major strand of HMRC’s goal to create a tax authority fit for the 21st century. Opening yours takes 5 minutes and can be done by visiting www.gov.uk/personal-tax-account.
By the end of 2016 its predicted that 10 million people will have PTA’s.
For most individuals it should make life easier because most people are employed and have straight forward tax affairs but there are a huge number of individuals who don’t have simple tax affairs for example:
- Self Employed
- Property Investors
This data can’t just be imported, accounts need to be prepared.
HMRC introduced Cash Accounting in 2013 to try to help small sole traders and partnerships.
You can choose to record your business income and expenses over the tax year in 1 of the following ways:
- using cash basis – record money when it actually comes in and goes out of your business (all money counts – cash, card payments, cheque, any other method)
- using traditional accounting (accruals basis) – record income and expenses when you invoice your customers or receive a bill
Cash basis might suit smaller businesses because, at the end of the tax year, you won’t have to pay Income Tax on money you haven’t received yet.
You must keep records of:
business income received
business expenses paid
But it doesn’t work for everyone! many still find the accruals basis is best
So are PTA’s a good thing? will it work for everyone?