HM Revenue & Customs (HMRC) has disclosed its intentions to elevate the income threshold that requires individuals to submit a Self-Assessment tax return.
This adjustment is due to take effect from the 2023-2024 tax year.
What are the current rules?
For the current tax period (2022-2023), individuals are obligated to send a Self-Assessment tax return if they have earnt over £1,000 in the last year as a sole trader.
Individuals also must submit a tax return if they were part of a business partnership or if they have a generated income of £100,000 or more.
What are the new proposed changes?
HMRC has proclaimed that from the 2023-2024 tax year, the income threshold demanding the submission of a Self-Assessment form will be elevated from £100,000 to £150,000.
This amendment is anticipated to be favourably received by numerous employees across the UK.
Despite this, individuals who now fall below this revised threshold are still required to send a Self-Assessment form if they fulfil any of the following prerequisites:
- Engaged in self-employment with a gross income exceeding £1,000
- Receipt of any untaxed income
- Obligated under the High-Income Child Benefit Change
- Partner in a business partnership
This development follows the recent HMRC revisions to the tax rate threshold for the tax year 2023-2024. The revised policy stipulates that individuals earning over £124,140 will now be subjected to an additional tax rate of 45 per cent.
These proposed amendments are projected to result in a higher tax obligation for thousands of taxpayers, considering the former threshold was an annual income of £150,000.
If you would like advice on how to submit a Self-Assessment tax return, get in touch today.
