The latest figures from HMRC show that 16% of taxpayers have signed up for the new accounts since they were launched last December.
Although it is understood that personal tax accounts will not be compulsory, they are a major plank of HMRC’s five-year plan to create ‘a tax authority fit for the 21st century’. Part of this overhaul will see the introduction of Making Tax Digital for business, which will require mandatory quarterly reporting for all businesses, a plan which has been criticised for being rushed and unnecessary.
By late 2018, buy-to-let landlords, the self-employed and most businesses will have to start providing quarterly reporting to HMRC, although details about the level of financial information required has not been finalised.
Reporting corporation tax obligations will not come online until 2020.
From an individual taxpayer perspective, in the longer term HMRC expects that personal tax accounts will replace the requirement for annual self assessment returns, currently completed by over 10m taxpayers for the 2014/15 tax year.
Personal tax accounts were launched in December 2015 and give taxpayers an online record of their tax information and a number of integrated services, including:
- estimates of income tax and details of tax code;
- file a self assessment tax return;
- check company car status and update details;
- claim a tax refund directly into a bank account and receiving it within three to five working days instead of waiting for a cheque or payable order;
- check and manage tax credits to reflect changing circumstances throughout the year;
- check state pension;
- check or update marriage allowance; and
- check or update benefits you get from work, such as company car details and medical insurance.
To set up an HMRC personal tax account, taxpayers will need a Government Gateway account and a National Insurance number, or via the gov.uk Verify system.