We have been aware for some time that in the current year, 2023/24, individuals with income taxed under PAYE (so employees in the main) whose salary and benefits do not exceed £150,000, will no longer be required to submit Self Assessment Tax Returns.
This is good news for many employees who previously had income above £100,000 and were required to file. HMRC will review their income tax position annually and provide confirmation of whether any additional tax is due.
It is highly likely that where a high-earner has a pay rise in year that takes them above £100,000, the personal allowance will not automatically be restricted and so an underpayment will arise.
HMRC will also not necessarily be aware of changes in benefits until the P11d is submitted after the year end and individuals will need to confirm any personal pension contributions.
More changes are on the way from 2024/25 which will mean even more employees will be outside the scope of Self Assessment.
Individuals can still choose to make submissions under Self Assessment and it does not stop other triggers creating a requirement to file, such as interest and rental income.
Making Tax Digital
Speaking of rental income, Making Tax Digital (MTD) which has been deferred until April 2026, will now only look at individuals with rental income and/or trading profits of more than £50,000 initially and then £30,000 from April 2027.
It had originally been intended to lower this further, to income under £30,000, but has now been delayed indefinitely.
More good news is that the ‘end of period statement’ will no longer be required, which will remove the double reporting of this income and reduce the total number of forms required annually from 6 to 5.
If you have any queries, questions or concerns about these changes – do get in touch and we will be happy to help.
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.