HMRC has announced a change in the threshold at which taxpayers need to complete a tax return. What’s the new threshold, and what do you need to do if affected?
Currently, those with income exceeding £100,000 must submit a self-assessment tax return each year. This means that employees with this level of income, who pay all their taxes via PAYE, have to complete a tax return simply to give HMRC the same information it’s already been given from payroll submissions and Form P60. From 2023/24, the threshold is increasing to £150,000; the reason for which is unclear as £150,000 does not correspond to any other income tax threshold, following the additional rate now starting at £125,140. However, it’s welcome news for those earning between £100,000 and £150,000.
The increase applies to the current tax year, so the last tax return that affected taxpayers need to file is the 2022/23 tax return which is due by 31 January 2024. HMRC will write to those who have no other reason to submit a tax return, e.g. to report untaxed income or a high income child benefit charge, to confirm that they have been removed from self-assessment.
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