Why set up a Personal Tax Account (PTA)?

The personal tax account (PTA) is effectively Making Tax Digital for individuals. HMRC’s intention is to develop a full range of services to allow taxpayers to have access to their information without having to contact HMRC by phone or post.

There are many services that individuals can access via their PTA. These include:
  •  reviewing PAYE coding notices
  •  filing self-assessment returns
  •  obtaining state pension forecasts
  •  updating tax credits and child benefit claims
  •  making marriage allowance transfers
PAYE

Any taxpayer can set up their PTA but the service is particularly valuable for employees as it enables them to check that HMRC holds the correct information about their employment, and to review and request amendments to PAYE coding notices. Using their PTA, employees can check that the details of their employment income held by HMRC are correct and resolve any discrepancies.

Estimated income

Within the PAYE section, an individual can also check whether HMRC’s estimates of any other income are reasonable. Following the introduction of dynamic coding, where HMRC updates coding notices in-year as a result of certain triggers, it is very important that HMRC’s estimates of the taxpayer’s total income for the year are reasonable.

The dynamic coding system uses the total estimated income figure to recalculate tax codes so, if the estimated total income is unreasonable, the taxpayer will receive an inappropriate code and end up paying too much or too little tax.

Individuals can apply for adjustments to be made to their estimated income through their PTA, without having to call HMRC.

State pension and NIC records

Probably the most popular function is the ability to check state pension entitlement. It is possible to see your full history of NI contributions at the click of a button – far quicker than writing off for a forecast. It is easy to see if there are any years where contributions are missing, or if anything looks odd.

Since this data is not necessarily reconciled to other HMRC systems, it is important to check that your history of contributions is what you expect. Again, it is far better to resolve any discrepancies now, than to find out years or decades down the line that your state pension is less than you expected.

Administration

Individuals can also use their PTA to deal with basic administration such as telling HMRC of a change of address or to print proof of their National Insurance number.

Those within self-assessment can also print off a tax computation or SA302, which is useful as proof of income for a mortgage application.

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