HM Revenue & Customs (HMRC) has revealed plans to increase an individual’s income threshold before being required to submit a self-assessment tax return.
The changes are due to come into effect from the 2023-2024 tax year.
For the current tax year (2022-2023), Self-Assessment tax returns must be sent if you earned more than £1,000 in the last tax year as a sole trader, if you were a partner in a business partnership, or if you earned an income of £100,000 or more.
In what will be viewed as a positive for many employees in the UK, HMRC has announced that as of the 2023-2024 tax year, the income threshold for needing to submit a Self-Assessment form will rise from £100,000 to £150,000.
However, those who will now fall under the threshold will still have to send a Self-Assessment form if they meet any of the following criteria:
- Self-employed with a gross income of over £1,000
- Partner in a business partnership
- Liability to the High-Income Child Benefit Charge
- Receipt of any untaxed income
This follows from the recent HMRC updates to the threshold for tax rates for the 2023-2024 tax year, which states that those earning over £125,140 will now be charged the additional tax rate of 45 per cent.
The proposed changes will see thousands paying more tax, as the previous threshold was an annual income of £150,000.
If you would like advice on how to submit Self-Assessment tax returns, please contact us.