Corporate report

Issue briefing: tax summaries

Updated 3 November 2014

Around 24 million people are to get their first Annual Tax Summary, explaining how their income tax and National Insurance Contributions have been calculated for the 2013 to 2014 tax year, and how this money was spent by the Government. This briefing explains why they have been introduced and who will receive them.

1. What do taxpayers need to do?

The tax summaries are for information only. There is no need for recipients to contact HM Revenue and Customs (HMRC) about them; those wishing to comment on the tax summary, or tax rates or how their taxes were spent can do so online: www.gov.uk/annual-tax-summary

2. Why are tax summaries important?

The Government wants to make it easier for taxpayers to see and understand how much tax they’ve paid, what their overall rate of income tax is, and how it has been calculated.

Each individual tax summary will show clearly what the Government has collected from the taxpayer, and illustrate how their money was spent.

The Government believes that drawing this information together in one place and sending it to taxpayers is the best way of making the public better informed and the Government more accountable for its decisions on both tax and public spending. As the UK’s tax authority, HMRC is best placed to issue these statements on behalf of Government.

3. Who gets one?

Around 24 million individual taxpayers will see a personal tax summary in this first year. The first 16 million summaries are being sent by post to people whose tax records have been updated recently by HMRC: these are taxpayers who have received an updated tax code or calculation in the past two years. Individuals in this group will not receive a tax summary if they have paid no income tax in the past year, or where HMRC has not finalised their tax position for the 2013 to 2014 tax year. For instance, where we are waiting for information like a change of address, or updated PAYE information from their employer.

A further eight million taxpayers who complete a self assessment tax return will view their summary digitally, if they are enrolled for HMRC’s online services. In future, HMRC will provide everyone with a personal digital tax account, which will include their own tax summary.

Those who don’t receive a tax summary can use our tax calculator at any time to view how their taxes are calculated and see how this contributes to public spending. A mobile app version of the calculator has already been downloaded more than 300,000 times.

4. What’s in the tax summary?

Each tax summary shows how an individual’s income tax and National Insurance Contributions have been calculated for the last complete tax year. So this year’s summaries are showing figures for the 2013 to 2014 tax year.

The tax summaries show taxable sources of income, including income from employment, pension income and taxable state benefits where that information has been provided to HMRC. They do not include figures for any benefits received, which are calculated by household, rather than on an individual basis.

The reverse side of the tax summary is designed to show broadly how an individual’s personal taxes have been spent, with annual figures on public expenditure produced by HM Treasury. These figures include all public sector spending, covering the devolved administrations as well as spending by local authorities and public corporations.