How to set up your personal tax account with HMRC

PHS Team

09 Jan, 2025

Setting up a personal tax account with HMRC is an important step for managing your taxes efficiently. This online service allows you to access your tax information, view your tax liabilities, and make payments conveniently. 

Whether you are self-employed, a freelancer, or an employee, having a personal tax account helps you stay organised and informed about your financial responsibilities. With your personal tax account, you can check your tax code, update your personal details, and even apply for certain tax reliefs. 

The process of setting up your account is easy and can be completed in just a few steps. By creating this account, you gain greater control over your tax affairs and can ensure that you meet all deadlines without hassle.

In this blog, we will guide you through the process of setting up your personal tax account with HMRC, making it easy for you to take charge of your finances.

What is a Personal Tax Account?

A personal tax account is an online service provided by HMRC that allows individuals to manage their tax affairs conveniently and efficiently. Whether you are self-employed, a freelancer, or an employee, having a personal tax account can importantly simplify your financial management.

Through your personal tax account, you can view your tax liabilities, check your tax code, and monitor any payments or refunds. The account also enables you to update your personal details, such as your address or bank information, ensuring that HMRC has the most accurate records.

One of the key features of a personal tax account is the ability to apply for tax reliefs and benefits online. Additionally, you will receive important notifications from HMRC regarding deadlines and updates directly through your account.

Benefits of Having a Personal Tax Account

1. Easy Access to Tax Information: A personal tax account allows you to view your tax liabilities, payments, and any outstanding amounts anytime, keeping you informed about your financial responsibility.
2. Manage Your Tax Code: You can check and update your tax code directly through your account. This feature helps ensure you pay the correct amount of tax and prevents overpayments.
3. Well-organised Application for Tax Reliefs: Applying for various tax reliefs and benefits is made simple with your personal tax account. You can complete applications online, saving you time and effort.
4. Track Self Assessment Progress: If you're self-employed or required to file a self assessment, your account lets you monitor your progress and deadlines, helping you stay organised.
5. Receive Important Notifications: HMRC sends important updates and reminders about deadlines directly to your account, ensuring you never miss important information.
6. Increased Financial Control: With all your tax information in one place, you gain better control over your finances, making it easier to plan and budget effectively.

Step-by-Step Guide to Creating Your Personal Tax Account

Setting up your personal tax account with HMRC is a simple and easy process that allows you to manage your tax affairs online. Here’s a detailed guide to help you through each step:

Visit the HMRC Website

Start by navigating to the official HMRC website. Look for the section dedicated to personal tax accounts, typically found under online services.

Register for an Online Account

If you don’t already have an HMRC online account, select the option to register. You will need to provide personal details such as your name, address, and National Insurance number.

Provide Required Information

Accurately fill in all necessary information, including your date of birth and contact details. This step is important as it helps confirm your identity and links your tax records to your account.

Verify Your Identity

HMRC requires you to verify your identity through various methods. This may include answering security questions or providing identification documents like your P60, passport, or recent payslips.

Create a User ID and Password

Once your identity is verified, you will need to create a user ID and a secure password to access your account. Make sure to choose a strong password for added security.

Log In to Your Account

After setting up your credentials, log in using your new user ID and password. This will grant you access to your personal tax account.

Explore Your Account Features

Familiarise yourself with the dashboard where you can view important information such as your tax liabilities, check your tax code, and manage other necessary tax-related tasks.

Is a Personal Tax Account Compulsory?

A personal tax account is not compulsory for everyone, but it is highly recommended. While you can manage your tax affairs without one, having an account with HMRC simplifies the process smoothly. If you are self-employed, a freelancer, or receive income from multiple sources, a personal tax account can be especially beneficial for keeping track of your tax responsibilities.

For employees, your employer typically handles tax deductions through the Pay As You Earn (PAYE) system, which means you may not need an account for basic tax management. However, even employees can benefit from having a personal tax account to check their tax codes, view payslips, and monitor any overpayments or refunds.

Ultimately, while it’s not mandatory to have a personal tax account, it provides valuable tools and resources that make managing your taxes easier and more efficient. By setting up an account, you gain access to important information and features that help you stay organised and compliant with HMRC regulations. 

Common Features and Functions of the Personal Tax Account

1. View Tax Information: Your personal tax account allows you to access detailed information about your tax history, including previous payments, tax liabilities, and any outstanding amounts.

2. Check Tax Code: Easily view your current tax code and understand how it affects your take-home pay. If there are differences, you can request changes directly through the account.
3. Make Payments: You can pay any outstanding tax bills directly from your account, making it convenient to stay on top of your financial responsibility.
4. Self Assessment Management: If you’re self-employed, you can complete and submit your self-assessment tax return online, track its progress, and receive notifications about deadlines.
5. Apply for Tax Reliefs: The account simplifies the process of applying for various tax reliefs and benefits, helping you maximise your savings.
6. Update Personal Details: Keep your personal information up to date, including address changes or changes in marital status, ensuring that HMRC has accurate records.
7. Receive Notifications: Stay informed with alerts about important deadlines, updates from HMRC, and any actions you need to take regarding your taxes.

Troubleshooting Common Issues During Setup

Setting up your personal tax account with HMRC can sometimes present challenges. If you encounter issues, here are some common problems and solutions.

1. Verification Delays: If your identity verification fails, ensure that the information you provide matches your official documents, such as your National Insurance number or passport.
2. Forgotten Password: If you forget your password, use the “Forgot Password” link to reset it.
3. Technical Glitches: If the website is unresponsive, try clearing your browser's cache or using a different browser.
4. Missing Activation Code: If you haven’t received your activation code, check your spam folder or request a new one through HMRC.

A personal tax account with HMRC importantly simplifies your tax management. By providing a centralised platform, it allows you to access all your tax information in one place, making it easy to track your liabilities and payments. You can quickly update your personal details and tax code, ensuring accuracy in your records.

Additionally, the account enables you to apply for tax reliefs and benefits online, saving you time and reducing paperwork. With reminders for important deadlines and notifications from HMRC, you can stay organised and compliant. Overall, a personal tax account smooths the entire process, making managing your taxes straightforward and stress-free.

PHS offers complete support to help you set up your personal tax account efficiently. Our experienced team provides personalised tax planning, ensuring you understand your tax responsibilities and opportunities for savings. 

Additionally, our responsibility support simplifies the process by assisting you in accurately preparing and filing necessary tax returns, helping you avoid penalties from HMRC. If you are looking for accountants contact us at 0208 8611685 and email at info@phs-uk.co.uk