If you are an employee in the UK who earns more than £100,000, you may be familiar with the hassle of filing a self-assessment tax return every year. However, this is about to change from the 2023-2024 tax year, as the government has announced that the income threshold for needing to submit a self-assessment form will rise from £100,000 to £150,000
This means that if you are taxed through PAYE (Pay As You Earn) and your income does not exceed £150,000, you will no longer have to complete a tax return. This will save you time and money, as well as reduce the risk of penalties for late or incorrect filing.
According to HMRC, this change will benefit around 1.5 million taxpayers who currently have to file a self-assessment tax return. The government hopes that this will simplify the tax system and make it easier for people to pay the right amount of tax.
However, there are some exceptions to this rule. You will still have to send a tax return if, in the last tax year, any of the following applied
• you were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
• you were a partner in a business partnership
• you had any untaxed income, such as money from renting out a property, tips and commission, income from savings, investments and dividends, or foreign income
• you had to pay the High Income Child Benefit Charge (for anyone who earns more than £50,000 and in receipt of child benefit)
• you wanted to claim some Income Tax reliefs, such as Marriage Allowance or Blind Person’s Allowance
• you received a notice from HMRC to file a tax return
The threshold for the 2022-2023 tax year, which many taxpayers and accountants will currently be preparing, remains unchanged at £100,000. This means that people who are taxed through PAYE only will still need to submit a self-assessment return for 2022-2023 if their income exceeds £100,000
If you are not sure whether you need to send a tax return, you can check on the HMRC website. You must tell HMRC by 5 October if you need to complete a tax return and have not sent one before. You can do this by registering for Self Assessment
If you need any help with your tax affairs, you can contact LeeP Accountants, or use the online services and guidance provided by HMRC.
