Self-assessment threshold rises from 2023/24 

There is a long list of reasons why it is necessary to complete a self-assessment tax return, but PAYE taxpayers are generally exempt from the requirement. The income ceiling previously subjected exemption to £100,000, but they have increased the threshold to £150,000 for the current tax year onwards.

The £150,000 threshold applies to total income – not just gross salary – and any taxable benefits and income from savings and investments.

Other reasons to file a return

Several other reasons mandate that an employee with an income below £150,000 completes a tax return. For example, where the taxpayer also has:

  • Income from property rental.
  • More than £10,000 in either dividend income or savings income.
  • Income from a trust.
  • To pay capital gains tax (more likely now with the exempt amount reduced from £12,300 to £6,000).
  • Income from self-employment or partnership income; or
  • To pay the High-Income Child Benefit Charge.

When a return is not required

Employed taxpayers with income between £100,000 and £150,000 for 2022/23 – and with no other reason for completing a return – should receive a self-assessment exit letter from HMRC confirming that they do not need to complete a return for 2023/24.

In other situations, it will be necessary for taxpayers to contact HMRC and inform them why a return is no longer necessary.

Taxpayers can ask for a return to be withdrawn even after HMRC has charged late filing penalties. Subject to HMRC agreement, the penalties will then be waived.

In some situations, a taxpayer might want to complete a return even if a tax return is not strictly required. The main reason will normally be to claim relief, such as pension contributions or donations to charity.

Failing to submit a tax return makes it more important than ever to check your tax code, which authorities typically use to collect tax on taxable benefits and savings income.

To check if a self-assessment tax return is required, use HMRC’s online tool found here.

How can we help you?

To find out how the self-assessment threshold rises will affect you, please contact us on 01444 716946 or on 01273 963656 or alternatively email us here.