12th April 2018
When was the last time you checked your online HMRC Personal Tax Account? Are you one of the 15 million people who are at risk of having errors on their files because you haven’t checked?
Official figures show that less than half of all UK taxpayers have logged onto their online account to check that they are paying the right amount of tax. Experts are urging those who haven’t checked to do so immediately!
Personal Tax Accounts were made available back in 2015 and are an incentive for taxpayers to take responsibility in ensuring that their tax code is correct.
These accounts are also beneficial for taxpayers, as they show exactly what the taxman knows about factors such as your income, state pension and National Insurance record.
Follow these 9 easy steps to access your Personal Tax Account:
Last year a staggering 6.7 million people paid too much or too little tax all because their tax code was wrong.
The codes include numbers and letters which are used to calculate the amount of tax that should be deducted from wages.
In the past these codes have always been included on payslips, however, since 2015 taxpayers can get a much fuller picture of their affairs, as the code appears next to the taxman’s account of what you earn and what you owe.
When you are online in your account, navigate to the ‘Income’ section and you will be able to find your tax code.
If you have more than one employers and draw a pension, you’ll have more than one code.
You can click on the ‘Understand your tax code’ link for a full breakdown of how much tax has been taken from your earnings. In this section it will show you how much employees can earn before they are taxed. In most situations employees are entitled to £11,500 personal allowance before any tax is deducted.
For those who have untaxed income e.g. rent taken from a property, this is what is known as your ‘taxable deduction’ and should also be listed. Any deductions are taken from the basic personal allowance.
Your tax code is created by the last digit being taken away from personal allowance which leaves 1150. A letter is then added which means different things:
You should log in and check whether your earnings recorded by the taxman are up to date. Follow these easy steps to check your details and change them:
Those who are self-assessment taxpayers e.g. the self employed, business owners, those who receive more than one source of income etc. can also use their account to update and file tax returns and make payments.
To make sure that you are paying the right amount of tax, you need to take control and ownership of your online Personal Tax Account and make sure data is correct.
If you have any questions about your Personal Tax Account or would like to speak to us about tax in general, please do not hesitate to get in touch.
have you read our previous post?