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Taxpayers’ understanding of tax and their tax obligations is limited, they feel ill-equipped to deal with issues concerning their tax and they generally consider management of their tax to be the responsibility of their employers, an HMRC report reveals say Harris & Co accountants Northampton, the specialist small business accountants.

The report is a result of research by HMRC, with the intention of gauging how well taxpayers understood tax and the taxation system, so as to identify how taxpayer experience of the PAYE process can be improved with a focus on using the digital account.

The research, which was carried out between November 2013 and January 2014 and is part of the Government’s 2010 ‘Digital by Default’ Strategy, set out to provide HMRC with an increased understanding of PAYE taxpayers in relation to their their perceptions about their roles and responsibilities, and who they feel is ultimately responsible for ensuring the accuracy of their tax and their willingness to engage with and take greater responsibility for their tax affairs via an online account.

The research found that taxpayer knowledge of how tax works is limited and few fully understood how their tax was calculated and what would trigger a change.

It identified that individuals do not feel equipped to deal with issues concerning their tax; do not generally recognise their role and responsibilities in managing their tax; and were not engaged with their personal tax, seeing it as their employer’s or pension provider’s responsibility under the PAYE system.

The research also indicated that individuals found the idea of an online tax account appealing if it could educate them about their tax, provide a facility to check their details, and give them the opportunity to interact with HMRC digitally.

Based on the findings, HMRC say that the Online Tax Account has the potential to make a positive change if it is designed to balance functionality, ease of use and the ability to educate.

The Account could also provide the platform for reframing engagement such that individuals will be better able to take responsibility for their personal tax.

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