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Why you should be checking your personal tax account

Whether you are self-employed or are running a business on the side, you will have a personal tax account which you should be checking. However, research finds that nearly half of UK workers don’t check their account.

checking your personal tax account

Here, Helen Spalding from HWB Chartered Accountants explains what a personal tax account is and the importance of it.

What is a personal tax account?

Each UK worker has a personal tax account (PTA) which is an official digital service provided by HMRC back in 2015. Your personal tax account allows you to check your tax affairs online whenever you want without needing to phone or write to HMRC.

Why do you need a personal tax account?

Your personal tax account gives you access to important information on the taxes you pay. From your personal tax account you can:

  • View and manage your tax details
  • Inform HMRC of a change of address
  • Complete a self-assessment tax return
  • Check your national insurance number and tax code
  • Apply for or manage your tax credits
  • Claim a tax refund
  • Check your state pension contributions
  • Check or update your marriage allowance

It is extremely useful for those who are self-employed or have second jobs, additional income streams or employment benefits as you can see your income tax and national insurance liabilities for the year ahead.

But how many of you are actually checking your tax accounts?

Despite the clear benefits of checking your personal tax account, Post Office research shows that as many as 46% of UK workers have never checked their personal tax account. 22% of people surveyed also thought they didn’t earn enough to warrant looking at their personal tax account. It’s important that you do keep on top of your tax affairs though, and here are a few reasons why:

Top reasons you should check your personal tax account:

Tax repayments

If you think you are due a tax repayment you can check on your personal tax account and make a claim. Please note, you will never receive an email inviting you to claim a tax refund from HMRC if you do this is a scam and should be ignored.

Taxable company benefits

If your company benefits have reduced, then you may be paying too much tax through PAYE. Likewise, if they have increased then it may result in an unexpected tax bill at the end of the year. By managing your taxable benefits online, you can eliminate under and overpayments in future.

State Pension estimate

You can view your National Insurance contributions that you have made throughout your lifetime and therefore have access to an estimate of the State Pension you will receive when you reach retirement age. If there are any gaps in your National Insurance contributions, you can choose to make voluntary contributions or also see how many more years you need to contribute in order to receive the maximum State Pension.

What do I need to do to set up a personal tax account?

To register for your personal tax account go here. You’ll need your National Insurance number and your P60 if you’re employed. You’ll then be provided with a gateway ID and set a password for future access.

Help and advice on your personal tax affairs

Unless your tax affairs are very simple, it can be valuable to have an accountant to help you calculate your personal tax bill and find ways to reduce it. Tax planning advice can provide a significant improvement in your take-home income, reduce the risk of making errors on your tax return, and make your finances more predictable over the long term.

More on getting financial advice and limited company taxes.

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