Updated self-assessment threshold for PAYE-only taxpayers

The self-assessment threshold for PAYE-only taxpayers will increase to £150,000 beginning with the 2023/24 tax year.

The £100,000 threshold for the 2022/23 tax year, which JW Hinks’ tax team is presently planning, remains unaltered. In other words, persons who are only taxed through PAYE will still need to file a self-assessment return if their income reaches £100,000 in 2022/23.

The threshold will rise to £150,000 in the fiscal year 2023/24. However, if a taxpayer fits one of the other self-assessment criteria, they must still file a self-assessment return. Those ‘other self-assessment criteria’ include:

• liability for the high-income child benefit fee
• receipt of untaxed income in excess of £2,500
• and receipt of self-employment income in excess of £1,000

These criteria are used by HMRC to determine whether or not a person is required to file a tax return, so it is vital that you consider them carefully and understand your obligations.

Taxpayers can use HMRC’s online tool to determine if they must file a tax return. Meanwhile, HMRC’s self-assessment manual can tell you everything else you might need to know about the self-assessment criteria. Taxpayers who have a tax due but do not meet any of the SA conditions may need to contact HMRC and request that the tax be collected through PAYE using their tax code.

In its discussion document Simplifying and modernising HMRC’s Income Tax services through the tax administration framework, HMRC explores the functioning of self-assessment criteria. The consultation, among other things, seeks comments on how taxpayers understand and manage the criteria, as well as prospects for improvement.

The report notes that “The government welcomes engagement from any individual, business or organisation with views on how Income Tax should be administered and made simpler for taxpayers. This is likely to be of particular interest to the self-employed, landlords, accountants, tax agents, legal professionals, payroll professionals, bookkeepers, insolvency practitioners, software providers, financial advisers and their clients.”

If you want to talk about your tax obligations, contact JW Hinks on 0121 456 0190. Our friendly and professional tax team can ensure that you stay on the right side of HMRC while not paying any more tax than you need to.