The new system of personal tax accounts is being rolled out by HMRC for individuals currently in self-assessment, with all taxpayers to have personal accounts by April next year.
The system of online accounts, which HMRC says is similar to online banking, will eventually replace annual tax returns.
The new accounts will allow people to see their tax details and make payments at any time of the day or year.
Two million businesses are already using the new system, and all of the country’s five million small businesses will have online tax accounts by April 2016.
The government says the new system should stop the build-up of tax due, or refunds owed, at the end of each financial year.
Ruth Owen (pictured), the director general of personal tax at HMRC, said: “The launch of personal tax accounts is a groundbreaking development for HMRC and our customers.”
HMRC’s aim is that by 2020 the digital accounts will be used by all taxpayers, individual or corporate. From 2018, businesses – including the self-employed and landlords – will have to update HMRC every quarter on activity that is their main source of income. The obligation to report quarterly will also apply where the money is a secondary source of income worth more than £10,000 and the main income is from employment or from a pension.
HMRC plans to bring all the information it holds on a taxpayer into one system, including data from employers, banks, building societies and other government departments.
