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Over 24m people to receive annual tax summaries

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HMRC is sending personal tax summaries for the 2013/14 tax year to around 16m taxpayers whose tax affairs for that year are finalised. A further 8m taxpayers who complete a self-assessment tax return will be able to view their summary online. Each summary shows how an individual’s income tax and NIC have been calculated, together with a breakdown of how these taxes have been spent on budget areas including welfare, health, education and foreign aid. These summaries are for information only and require no action on the part of taxpayers.

The initiative has met with a mixed reaction. The Daily Telegraph reported that ‘the data shows that thousands of pounds of people’s money is being spent on the benefits bill as well as servicing the national debt’, while The Guardian said that ‘the personalised breakdown of where taxpayers’ money is going has divided critics, with some saying the welfare analysis is misleading.’

The move was described by Kevin Nicholson, head of tax at PwC, as ‘a really positive step’. He added: ‘Rather than going into some nebulous pot, people can now see everything they help pay for. The research from our “future of tax” project shows people are more likely to accept taxes if they can see how they are spent. Some people may question the way the tax cake is sliced, but getting more people engaged in tax policy can only be a good thing. Better communication and education on tax mustn’t stop here.’

However, Dawn Register, partner in BDO’s tax dispute resolution department, said: ‘There is also a question hanging over the cost of this exercise, and whether or not it is a valuable use of taxpayers’ money. This was all done in the name of “transparency”, but it is such a broad brush view of tax spending that it is shines a very dim light on the details of where money is well spent and where there is wastage. The use of the app is in line with HMRC’s digital strategy for a greater use of modern technology into the department, although I can’t see people rushing to download this.’