Self Assessment Threshold Change: Key Updates from HMRC
For the 2023 to 2024 tax year, HMRC has made a significant change to the Self Assessment threshold for individuals who are taxed through PAYE. The threshold has been increased from £100,000 to £150,000, which means that individuals with income between £100,000 and £150,000 who are taxed through PAYE will no longer be required to complete a Self Assessment tax return, provided they do not meet any other specific criteria.
When You Still Need to File a Tax Return
While the threshold change applies to PAYE-only taxpayers, it is important to note that even if your income is below £150,000, you may still be required to submit a tax return if any of the following apply:
Untaxed Income: If you receive any untaxed income over £2,500, you will need to file a return.
Business Partnership: If you are a partner in a business partnership, a tax return is still required.
High-Income Child Benefit Charge: If you are required to pay the High-Income Child Benefit Charge due to your income level, you must submit a tax return.
Self-Employment: If you are self-employed and your gross income exceeds £1,000, you will need to complete a tax return.
These criteria ensure that taxpayers who have complex income sources or tax obligations are still captured under the Self Assessment system, even if their income is below the £150,000 threshold.
Looking Ahead to 2024-2025
From the 2024 to 2025 tax year onwards, HMRC will completely remove the income threshold for PAYE-only taxpayers. This means that all PAYE taxpayers will be required to file a tax return if they meet any of the above criteria, regardless of their income level.
To check if you need to file a tax return, you can use HMRC’s online tool, available here. Make sure to stay informed and submit your tax return on time to avoid penalties and ensure compliance.