Modifications to self-assessment criteria

Starting from the 2023/24 tax year, there will be changes to the self-assessment (SA) criteria. 

For taxpayers who are taxed solely through PAYE, the SA threshold will increase to £150,000.

This adjustment in the SA threshold was announced in Agent Update 108. However, for the current tax year of 2022/23, the threshold remains unchanged at £100,000. Therefore, individuals who are taxed through PAYE only must still file an SA return for 2022/23 if their income exceeds £100,000.

From the 2023/24 tax year onward, the new threshold of £150,000 will apply. Nevertheless, taxpayers who meet any of the other SA criteria will still be required to submit an SA return. 

The existing additional criteria include:

  • Liability to the high-income child benefit charge
  • Receipt of self-employment income over £1,000
  • Receipt of untaxed income amounting to £2,500 or more

These SA criteria serve as administrative guidelines utilised by HMRC to determine whether an individual should file a tax return. However, they are not officially outlined in legislation.

Taxpayers can use HMRC’s online tool to determine if they need to file a tax return. For further information on the SA criteria, HMRC’s self-assessment manual provides more details. Taxpayers who have a tax liability but do not fall within any of the SA criteria may need to contact HMRC to arrange for the tax to be collected through PAYE using their tax code.

HMRC is currently reviewing the implementation of the SA criteria in its discussion document titled “Simplifying and Modernising HMRC’s Income Tax Services through the Tax Administration Framework.” 

As part of the consultation, taxpayers are encouraged to provide feedback on their understanding and navigation of the SA criteria, as well as suggest opportunities for reform. The deadline for responding to the consultation is June 7, 2023.

If you have any questions, please contact Karen Keeling.