The self assessment (SA) threshold for taxpayers taxed through PAYE only, is rising to £150,000, from the 2023/24 tax year onwards.
Changes to Self Assessment Tax Threshold
This increase in the Self Assessment (SA) threshold was first announced in May 2023. The threshold for the 2022/23 tax year, which many taxpayers and accountants are currently preparing, remains unchanged at £100,000. Which means that people who are taxed through PAYE only, who earn over £100,000 annually will still need to submit an SA return for 2022/23.
The increase in the threshold to £150,000 will take effect from the 2023/24 tax year. However there are other SA criteria, which means that PAYE taxpayers need to submit an SA return:
- liability to the high income child benefit charge
- receipt of self-employment income over £1,000
- receipt of untaxed income of £2,500 or over
HMRC uses these criteria to determine whether a worker should submit a self assessment tax return. However, these are not legislated. To find out if you should submit a SA tax return you can use HMRC’s online tool. More detail about the SA criteria can be found in HMRC’s self assessment manual. Taxpayers who have a tax liability, but do not fall within any of the SA criteria, may have to contact HMRC to arrange for their tax to be collected through PAYE using the correct tax code.
HMRC is reviewing the operation of the SA criteria in its discussion document Simplifying and modernising HMRC’s Income Tax services through the tax administration framework. The consultation asks for feedback on how taxpayers understand and navigate the SA criteria, and opportunities for reform. If you would like to respond to the consultation, the deadline is 7 June 2023.
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