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Tax returns earnings limit changes

Tax returns earnings limit changes

The threshold for PAYE taxpayers to be exempt from having to file a self-assessment tax return has been increased from £100,000 to £150,000 for the current tax year onwards.

The £150,000 threshold applies to total income, so not just gross salary but also any taxable benefits and investment income. Employed taxpayers with income between £100,000 and £150,000 for 2022/23 – and with no other reason for completing a return – should receive a self-assessment exit letter from HMRC so that they do not need to complete a return for 2023/24.

However, as a 60% tax rate applies on income between £100,000 and £125,140, any mistake by HMRC could be expensive. It may therefore be a good idea to still submit a return to ensure correct relief is given for deductions such as professional subscriptions, and always where reliefs such as pension contributions or donations to charity need to be claimed.

Newsletter Jul/Aug 2023
Newsletter Jul/Aug 2023
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