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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Do I need to complete a personal tax return?
Are you unsure if you need to complete a personal tax return? Then read on, because there are a number of reasons why you may need to.

You will have to file a tax return for 2018-19 if you were:
 
  • Self-employed as a sole trader and earned over £1,000 during the tax year
  • A partner in a business partnership
  • Company Director

If the only income you received during the tax year is your pension or salary, it is unlikely that you will be required to file a tax return.

However if you have other incomes, such as those listed below, you may be required to file a tax return.
 
  • Rental Income
  • Tips and commission
  • Income from savings, investments or dividends
  • Foreign income

Other reasons for filing a tax return is to serve the purpose of claiming back expenses or reliefs.

When do I need to file my return by?

The 2018-19 tax year has now ended, so personal tax returns are already starting to be filed ahead of the 31st January 2020 deadline.

We always advise clients to get tax returns filed as early as possible, to ensure that the deadline is met.  Filing early will also ensure you know what the tax bill will be, and could also result in a reduced payment on account in July 2019.

Where do I find more information on tax returns?

If you are unsure whether you should be completing a tax return then check out HMRC’s link: https://www.gov.uk/check-if-you-need-tax-return  or call us on 01462 791079 and we’ll be happy to offer advice and assistance.
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Watch out for tax scams targeting young people this Spring
We love the month of May; the weather is getting better and everywhere’s looking much greener. Spring has certainly sprung, but there has been a warning to young people from HMRC to watch out for Springtime tax refund scams around this time.

Criminals often target young individuals or the elderly as these groups of people are likely to be less familiar with the UK tax system. During the months of April and May, criminals often bombard taxpayers with tax refund scams at the same time as genuine rebates are processed by HMRC.

In the spring of 2018, approximately 250,000 reports of tax scams were received by HMRC.

Individuals have been warned to be wary of text messages, calls and voicemails purporting to be from HMRC. These are often designed to extract personal or financial information from the taxpayer.

Angela MacDonald, Head of Customer Services at HMRC, said: 'We are determined to protect honest people from these fraudsters who will stop at nothing to make their phishing scams appear legitimate.

'HMRC is currently shutting down hundreds of phishing sites a month. If you receive one of these emails or texts, don't respond and report it to HMRC so that more online criminals are stopped in their tracks.'

If you’re worried you may have been targeted, or would like to know more, visit Action Fraud. 
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Employment Benefits in Kind Returns
Do you provide your employees with any benefits as a perk of the job, or make regular payments to directors that could be classed as a loan?
If the answer is yes then as an employer you are required to complete the required forms and submit them to your tax office by 6 July 2019.


If any company directors have an overdrawn account over £10,000 at any point in the year where loans were made and not repaid, or the dividends are not being declared on the 2019 tax return it needs to be reported.

Most benefits in kind attract Class 1A NIC and form P11D(b) is used to calculate the Class 1A NIC due by the employer.

On the P11D forms, the benefits have to be divided into two types to facilitate the tax and National Insurance calculations that follow.  Some items reported on the form do not create a tax charge, others do.

Tax and National Insurance is not charged if the expenses are wholly and exclusively for business.   However any other Benefits in Kind (company cars, medical insurance etc) would need to be reported.

The Class 1A NIC charged on company benefits provided by an employer in the year ended 5 April 2019 is due for payment on 19 July 2019.  If it’s not paid by that date, the tax office will charge interest.

Do not ignore this and get the returns filed as soon as possible as there is a penalty of £100 (for every 50 employees) if the forms are not received by 6 July 2019, with an additional £100 penalty for each further month late.

We would be pleased to offer assistance in completing these forms so please contact us to see how we can help you.  
 
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Get in touch - If you'd like to find out more about how we can help you and your business pay less tax, generate more profits and create long-term wealth for you and your family, please get in touch now