Self-assessment threshold increases to £150,000
HMRC revealed recently that the Self Assessment threshold for PAYE taxpayers will increase from £100,000 to £150,000 for the 2023/24 tax year.
Under current rules, individuals that pay tax solely through PAYE are only legally required to file a Self Assessment Tax Return if they earn more than £100,000 per year.
The threshold change for 2024 means that fewer taxpayers will need to submit Tax Returns after that point, which may help to reduce their administrative burden.
HMRC have reminded affected tax payers that this change in the Self Assessment threshold doesn’t come in until the year ended 5th April 2024, and they should continue as previously until then, as the threshold remains unchanged at £100,000 for the 2022/23 tax year.
Anyone who earned between £100,000 and £150,000 in the year ended 5th April 2023 still needs to submit a Tax Return by the usual deadline on 31st January 2024.
Taxpayers that fall into this earnings bracket should receive a Self Assessment exit letter from HMRC after submitting their Return for the year ended 5th April 2023, as long as they don’t meet any of the other requirement criteria that may be relevant at the time.
The current criteria, apart from earning beyond £100,000, that require you to submit a Return include:
- If you were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
- If you were a partner in a business partnership
- Receiving money from renting out a property
- Receiving tips and commission
- Receiving income from savings, investments and dividends
- Receiving foreign income
These may change further between now and the end of the next tax year, so if you’re unsure, please get in touch at that point to check your responsibilities.
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