20-Jul-2023
Self-Assessment Threshold Increased To £150,000 – And Some People May Pay More Tax
Taxpayers earning between £100,000 and £150,000 whose only income is taxed under PAYE will be removed from self-assessment from the 2023/24 tax year onwards, which could result in those affected paying more tax.
That’s because from tax year 2023 to 2024 onwards, the Self Assessment threshold for customers taxed through PAYE only, will change from £100,000 to £150,000.
Affected customers do not need to do anything now as the Self Assessment threshold for 2022 to 2023 tax returns remains at £100,000.? They will receive a Self-Assessment exit letter if they submit a 2022 to 2023 return showing income between £100,000 and £150,000 taxed through PAYE and they do not meet any of the other criteria for submitting a Self Assessment return.
For the 2023 to 2024 tax year onward customers will still need to submit a tax return if their income taxed through PAYE is below £150,000 but they meet one of the other criteria for submitting a Self Assessment return, such as:
- receipt of any untaxed income
- partner in a business partnership
- liability to the High Income Child Benefit Charge
- self-employed individual and with gross income of over £1,000
It is thought that the change may lead to some people overpaying tax. Accountingweb.co.uk said: “Reader kevinringer said he attended a Teams meeting with HMRC and reported that these taxpayers will still be required to notify HMRC of any tax payable but not through the self assessment system. He said this means phoning or writing to HMRC instead.
“I would have thought HMRC would prefer these clients to be in self assessment (SA) because surely it requires less HMRC resources to process an SA return (especially if submitted online) than having to process a letter or phone call,” said kevinringer.”
The team at Barter Durgan can advise on all tax and accountancy matters.
