Her Majesty's Revenue & Customs (HMRC) is considering setting up online accounts for individual PAYE taxpayers and introducing annual tax statements as part of efforts to make the UK tax system easier to understand.
An online account similar to a system currently in place in Ireland would allow individuals to view their tax records, claim a range of credits, apply for refunds and declare additional income.
The government has also looked to Denmark for inspiration and is considering introducing tax statements in the UK for those who do not self-assess.
The statement, which would be separate from the employer-produced P60 - would show people how much tax they have paid, including their overall contribution from income tax and national insurance. It may also include the rates of tax they have paid and how this contributes to government spending.
The options are laid out in a discussion paper looking at ways to improve individuals' understanding of the tax system.
Modernising the administration of the personal tax system, published today, also considers the benefits of pre-filled tax returns and whether to step up public engagement on tax issues.
HMRC is seeking the views of taxpayers to establish whether increased transparency and accessibility to tax information can build greater awareness and understanding of how the system works and how individuals can take a more active role in ensuring they pay the right tax.
It said it had already begun to make the system simpler to understand, such as its work on integrating the operation of income tax and national insurance contributions.
Avoids paperwork with two-step process
Investment process will use machines
Mark Sterling accused of operating a collective investment scheme without authorisation
'Increasing engagement will only favour those prepared to put in the effort'