Real Time Information (RTI) has been an accepted part of the payroller’s life for the last 5 or 6 years, but there are still procedures that are not always carried out in “real time”.
Tax codes - Tax codes are very often still not adjusted until the start of the following year despite HMRC having the information in real time Student loans – the same applies to student loans where the Student Loan Company (SLC) are only advised of ex-student repayments of loans after the end of the tax year.Well, the first of these anomalies is to be addressed in 2017/2018. HMRC has advised that one of its priorities is to make near real time adjustments to taxpayers’ tax codes so they pay the right amount of tax within the current tax year. This is part of HMRC’s timeline for “making tax digital” and moving to a fully digital tax system by 2020.
All good news for individuals because more taxpayers will not end the tax year with under or over payments of tax.
Taxpayers who have registered for a personal digital tax account will have the ability to claim in-year repayments and have it paid back to them through their back account.
This will have an impact on employers and pension providers who will experience higher numbers of coding notices from HMRC due to the increasing frequency of PAYE code changes.
This has to be good news for individuals.
To set up a personal tax account is very easy and only takes minutes to do and individuals can start the process by going to https://www.gov.uk/personal-tax-account
The benefits are many with more to follow. The account can be used to:
check Income Tax estimate and tax code fill in, send and view a personal tax return claim a tax refund check and manage tax credits check State Pension track tax forms that have been submitted online check or update Marriage Allowance tell HMRC about a change of address check or update workplace benefits, e.g. company car details and medical insurance