HMRC removes PAYE Self Assessment threshold

Payroll, Personal Tax,

HMRC has removed the existing PAYE Self Assessment threshold, having announced high earners with PAYE income exceeding £150,000 will be exempt from filing self-assessment tax returns, from the 2024/25 tax year. 

This change, following the recent threshold increase from £100,000 to £150,000 for 2023/24, is a major shift that’s expected to benefit around 338,000 taxpayers.

It’s a change to be careful of though!

It appears to streamline the tax process, but individuals with any additional income, such as dividends, savings interest or rental income, will still have to file self-assessment returns. 

Accounting Industry Concerns

The Association of Taxation Technicians (ATT) has raised concerns around the announcement, including around the lack of consultation from HMRC: ‘As was the case with the rule change on Self Assessment threshold announced in June, there was no consultation on these proposals. We worry the changes may have been introduced primarily as a cost-saving measure without consideration of the wider impacts.’

We’re also concerned around the various announcements coming from HMRC, being made without consultation. They form part of a growing feeling of frustration across our industry. 

ACCA Survey makes grim reading

A recent survey from the Association of Chartered Certified Accountants (ACCA) has underlined the challenges many UK accountants face when dealing with HMRC services. 

Over 90% of respondents expressed the urgent need for HMRC to improve its service across several key areas, while 52% reported that HMRC’s service levels were negatively affecting productivity and efficiency, impacting both accountants and their clients. 

The areas identified for drastic improvement included: 

Reduced call waiting times: Accountants called for shorter waiting times when seeking assistance from HMRC. 

Enhanced call handling systems: They urged HMRC to provide better call handling systems, including queue information and call-back options. 

Improved communications: Respondents emphasised the need for more efficient communication methods, with a preference for greater use of email. 

We know many of our clients are feeling just as frustrated!

If you’re struggling to reach HMRC we’d love to be able to offer some advice, or alternate options. Sadly, there is little we’re able to suggest, and there are very few alternatives! We’re very happy to help where we can though, so please do get in touch if you have any concerns and if we can help, we’ll be very happy to do so.

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