A key part of this has already begun to take place, with a million customers completing their Self Assessment this month set to be directed to their online Personal Tax Account, HMRC officials said.

HMRC published a report today about the broader aims to make the system entirely online.

Ruth Owen, HMRC’s director general of personal tax, said: “The launch of Personal tax Accounts is a ground breaking development for HMRC and our customers.

“Remember when you started banking online? Well, this is the equivalent shift in service for the majority of our customers wanting to do business with us online.

“We’ll be developing the PTA further so it will becomes the one place to go for all our customers to do business with HMRC.”

The ‘Making Tax Digital’ report, published today, sets out how this will be achieved by 2020.

Between now and May 2016 HMRC said it will be adding new services to the Personal Tax Account, including:

• Improvements to the ‘check your tax estimate service’ so customers
can look a year ahead and back on their current, future and previous tax position
• A new online payment and repayment service
• Expanding the opportunity for non-Self Assessment customers to
choose to stop receiving paper from us
• Integrating the Tax Credits online service in time for the renewals of
Tax Credits
• Introducing change of circumstances for the Marriage Allowance
service
• Introducing the new National Insurance/State Pension service – a trial
which started this month.

Two million businesses are already using their digital accounts and every business will have access to one by April next year, HMRC said.

The online Personal Tax Account is designed to:
• provide a clear and joined-up view of the tax they pay and benefits
they are entitled to
• enable customers to update their tax details as they occur in real time,
removing the need to resubmit information
• make it easier and more efficient to contact HMRC officials through
services like web chat and virtual assistant.

Financial Secretary to the Treasury, David Gauke, said: “Giving customers the ability to manage their tax affairs online is our latest step towards a fully digital tax system. This government is determined to revolutionise how we deliver public services and the tax system is no exception.

“By 2020 HMRC will be a world-leading tax administration that is efficient, effective and easier for customers to use, enabled by £1.3 UK taxpayers will now be able to manage their tax affairs online with the official launch of Personal Tax Accounts.”

Making Tax Digital sets out four key foundations:

- Tax simplification
- Tax all in one place
- Making tax digital for individual taxpayers
- Making tax digital for businesses.