Are you encouraging your clients to access their personal tax accounts? Over 16 million people have set up their PTA and enjoy the real benefits of instant accessing their personal tax data.
The personal tax account (PTA) is effectively Making Tax Digital for individuals. Ultimately, HMRC’s intention is to develop a full range of services to allow taxpayers to self-serve without having to contact HMRC by phone or post.
Although developments to the PTA have temporarily stalled because of the demands on HMRC resources created by Brexit, there are already 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
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.
Checking whether HMRC holds the correct employment details is particularly useful as RTI data can contain errors: mismatches and duplicated payroll records do occur. In such cases, the individual’s form P60 or P45 is the only proof of their income, tax deductions and national insurance contributions for the period. Using their PTA, employees can check that the details of their employment income held by HMRC are correct and resolve any discrepancies.
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.
Probably the first thing most people do (okay, it was the first thing that I did) on creating a PTA though is to check their 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.
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.
Tax agents cannot access an individual’s PTA. This is a huge source of frustration for tax agents, who would be able to advise clients more effectively if they had easy access to all their client’s relevant tax details.
The major professional bodies have been arguing that tax agents should be able to see and do what their clients can since the inception of the PTA. It is certainly always at the top of any ATT wish-list when we are asked to comment on HMRC’s digital services.
Tax agents should not attempt to circumnavigate these restrictions by setting up a client’s PTA themselves. Agents who are members of one of the professional bodies which formulate the professional conduct in relation to taxation (PCRT) code are specifically advised to avoid knowing or using the client’s personal access credentials. In practice, this restriction applies to all agents, as HMRC takes a dim view of any agent accessing a client’s details in this manner.
It is worth encouraging those clients who are prepared to engage digitally to set up their PTAs themselves. Empowering clients to understand and access more information about their tax affairs should not result in the loss of meaningful work, and it does mean that clients can then access and share with you the data you need from their PTA such as NIC records, SA302s and pay and tax data details, especially for previous years where the client has lost paperwork.
In future, it may also help to speed up agent authorisation to act for new clients as HMRC develops more digital authorisation routes for clients.
ATT Technical Officer
The Association of Taxation Technicians
Helen Thornley has a focus on personal and capital taxes. Initially training as an accountant before moving to tax, she worked in practice until her appointment as a technical officer in 2017. She also has an interest in the history of tax.