HMRC Planning Online Tax Accounts

HMRC Planning Online Tax Accounts

June 19th 2011 4:33 pm


Further to our report about changes due to be made to the way in which employers report payroll information to HM Revenue &am ...


Further to our report about changes due to be made to the way in which employers report payroll information to HM Revenue & Customs (HMRC), information has now emerged on one of the practical benefits of this transition for employees. To help make millions of people more aware of the amount of tax they pay, the Treasury is putting together a special online portal for people to log into and check their own tax account. Under previously planned changes, employers are to send information about tax and other deductions when they pay an employee, rather than at the end of year using the Form P35 employee summary and the Form P14 Individual Employee Payroll Deductions Record. The planned change keeps records updated on a week by week basis and allows taxpayers to keep an eye on their taxation and notify/correct any errors much more quickly. HMRC are confident that by removing the time lag between tax reporting these changes will stop recurrences of the much publicised errors over the last couple of years. Not everyone is happy though. Accountants from the Chartered Insititute of Taxation are amongst the first to state they are worried about the implementation of such a scheme. Taxpayers are also expressing concern about the cost of another IT project by the HMRC, as well as the timescale and resources required to make sure the systems are secure.

Demo of the intended scheme

By logging into you can get a taster of what is planned. The 'real time information' scheme, which is the backbone of the online tax accounts system, promises the following: * make it easier to ensure individuals pay the right tax after a change of job and remove the need for the P45/P46 process over time; * offer the prospect of simplifying the PAYE end of year reconciliation process for employers and HMRC; * remove much of the uncertainty that leads to errors in the Tax Credits system; and * support the introduction of the Universal Credit from October 2013.


Before the online tax account system can start, all employers are required to have switched to the 'real time information' scheme whereby they electronically submit information about an employee's pay and tax history at every payment cycle. This process should begin by October 2011, in trial form, to ensure the data quality and system security. From April 2012, volunteer employers will begin using the new system. From April 2013, all employers will be required to use the 'real time information' system and by October 2013 the migration should be complete. The Government provided a clue toward this system buried within its 2011/2012 Budget Document with its promise to create a tax calculator for PAYE individuals online to help make taxation more accessible. From the above information it is likely to be October 2013 before a fully operational online HMRC personal account website is available.

UK Tax Calculators

Since 2008, have provided a free online suite of tax calculators to help people check and plan their income and taxation across all major UK taxes. The website works for people with single or multiple income sources, utilises a tax code checker, tax refund check and other tax planning measures such as salary sacrifice, tax relief on pension contributions and childcare vouchers. Fully updated with every tax change, and accessible for every tax year from 2003 to this year, 2011. Whilst not providing your personal account to view, the website provides you with accurate tax calculations without taking any personal details or requiring registration/security codes.

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