Jennifer Collins, associate director at RSM considers the implications of the increase in the earnings income threshold to £150,000 for self assessment tax returns
The increase in the earnings income threshold to £150,000 is expected to remove up to 338,000 taxpayers from the requirement to file a self assessment tax return with HMRC this year.
Prior to 6 April 2023, taxpayers with earnings above £100,000 were required to file a tax return, even if all income was taxed at source through PAYE. This threshold increased to £150,000 from 6 April 2023 and was removed altogether from 6 April 2024.
Whilst this is a welcome simplification, if HMRC informs taxpayers that they no longer need to file a tax return, taxpayers often incorrectly assume they no longer have tax to pay. HMRC states that you only need to submit a tax when your ‘income from savings or investments is over £10,000’.
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