Everything you need to know about the self-assessment threshold change

Previously, most people taxed through PAYE do not need to complete a self-assessment tax return unless they have earned more than £100,000. However, the self-assessment threshold has now changed. If you earn more than £150,000 taxed through PAYE, you must submit a self-assessment tax return. 

What is the threshold change, and when does it come into effect?

The self-assessment threshold has increased, and anyone earning £150,000 or more via PAYE must complete a tax return. The change comes into force for the 2023-24 tax year and will apply to subsequent years.

What happens if I no longer earn more than the threshold?

If you submitted a tax return for the 2022-23 tax year that shows you earned between £100,000 and £150,000 via PAYE and do not meet any of the other tax return criteria, HMRC will likely send you a self-assessment exit letter.

If you do not receive a letter, or your circumstances have changed, and you believe you no longer need to send a tax return, you must tell HMRC. HMRC will review the information, and if they agree, they’ll send a letter confirming you do not need to file a return. You can notify HMRC by:

• Filling in an online form – you’ll need a Government Gateway account
• Using HMRC’s online digital assistant
• Phone or post

Please have your National Insurance and UTR numbers to hand as you may be asked to provide this information.  

What are the other criteria for self-assessment?

You are required to submit a self-assessment tax return if, in the last tax year (6^th April to 5^th April), any of the following applied:

• You were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
• You were a partner in a business partnership
• You had a total taxable income of more than £150,000
• You had to pay Capital Gains Tax when you sold or ‘disposed of’ something that increased in value
• You had to pay the High Income Child Benefit Charge

You may also need to file a self-assessment tax return if you have any untaxed income, such as:

• Money from renting out a property
• Some COVID-19 grant or support payments
• Income from savings, investments and dividends
• Foreign income
• Tips and commission

If you need to complete a tax return and have not sent one before, you must notify HMRC by the 5th of October by registering for self-assessment. If you are unsure whether to submit a tax return, you can check online via the government’s website.

Free consultation for a 2023-24 Tax Return with Churchill Knight

If you are still determining whether you need to submit a self-assessment tax return, why not call our expert Personal Tax team to discuss your circumstances? They can advise whether you meet the criteria for self-assessment, and you’ll benefit from the following when choosing our service:

• They’ll complete and submit your tax return lawfully, accurately and on time to HMRC on your behalf
• You’ll receive continuous help and support from our team
• We’ll advise you of your tax liability or refund

If you are interested in Churchill Knight’s tax return service, please call our friendly team on 01707 871622. Alternatively, please complete the short form on our website, and a member of the team will contact you shortly.