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Nov 30, 2023

HMRC removes self-assessment for PAYE high earners

HMRC has announced a major shift in tax procedures, exempting high earners with PAYE income exceeding £150,000 from self-assessment tax returns starting in the 2024/25 tax year.

This change, following the recent threshold increase from £100,000 to £150,000 for 2023/24, is expected to benefit approximately 338,000 taxpayers.

While this move appears to streamline the process, caution is advised. Individuals with additional income, such as dividends, savings interest, or rental income, are still obligated to file annual returns.

The Association of Taxation Technicians (ATT) has raised concerns about the reduction in tax returns potentially increasing penalties and straining HMRC's customer service.

Jon Stride, vice chair of the ATT technical steering group, said:

"From April, if you have dividend income of more than £500, you will have tax to pay on that income if you're an employee earning more than the personal allowance.

"Holding a few shares here and there is not unusual, and dividend information is not readily available to HMRC, so taxpayers will need to remember to contact HMRC to declare this type of additional income and arrange to pay tax on it."

Talk to us about these changes.