Making Tax Digital (MTD) is a major new initiative from the HMRC which will fundamentally change how tax is paid. In the third of our series of articles, here we look at what MTD means for individuals…
Personal Tax Accounts (PTA)
The PTA enables individuals to communicate with the HMRC, to update any financial details, and check their tax affairs in real time. Actions that can be undertaken include making tax payments, providing bank details, plus any taxable benefit details. If you haven’t yet got yourself a PTA, then you can go here for more details and to go through the registration process. The benefit to you is that it is hoped that the requirement to complete and file self-assessment tax returns will lessen for those with straightforward tax affairs.
This is where the HMRC has the power to assess your tax liability for income or capital gains tax, without the tax payer needing to complete and submit a tax return. Currently, only certain taxpayers with a state pension are included in this but there are plans to roll it out to other groups of taxpayers in future years.
Under this scheme, individuals don’t submit a tax return, but rather HMRC send out a calculation of tax owed, which can be viewed in their PTA. If you disagree, you then have a period to appeal against that calculation.
All of MTD is moving towards a fully digital tax system. As with all of these big technological changes, we don’t expect it all to go smoothly. And of course, we are more than happy to help you with any questions you have about how MTD will affect your own circumstances. Don’t hesitate to contact us for help.
In the next of this series of articles, we’ll be looking at what MTD means for the self-employed.