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Starting from the 2023/24 tax year, the threshold for self-assessment (SA) for taxpayers who are solely taxed through PAYE will increase to £150,000.

The announcement regarding the increase in the SA threshold was made recently by HMRC. For the current tax year 2022/23, the threshold remains unchanged at £100,000. Therefore, individuals who are taxed solely through PAYE will still need to submit an SA return for 2022/23 if their income exceeds £100,000.

However, from the 2023/24 tax year onwards, the threshold will be raised to £150,000. Nevertheless, taxpayers who meet any other SA criteria will still be required to submit an SA return. Some of the existing criteria include:

• Being liable for the high-income child benefit charge

• Receiving self-employment income over £1,000

• Receiving untaxed income of £2,500 or more

These criteria serve as administrative guidelines used by HMRC to determine whether an individual should submit a tax return. However, they are not formally outlined in legislation.

Taxpayers can utilize HMRC’s online tool to check whether they are required to submit a tax return. Further information on the SA criteria can be found in HMRC’s self-assessment manual. Taxpayers who have a tax liability but don’t fall within any of the SA criteria may need to contact HMRC and arrange for the tax to be collected through PAYE using their tax code.

HMRC is currently reviewing the operation of the SA criteria as part of its discussion document titled “Simplifying and modernising HMRC’s Income Tax services through the tax administration framework.”  The consultation seeks feedback on various aspects, including taxpayers’ understanding and navigation of the SA criteria, as well as opportunities for reform.

Please get in touch with a member of the team if you need any assistance in preparing your self assessment return.