Important Changes to Self-Assessment Criteria

For the current tax year of 2022/23, which taxpayers and accountants are currently preparing for, the SA threshold will remain unchanged at £100,000. This means that individuals taxed through PAYE only will still be required to submit an SA return for the 2022/23 tax year if their income surpasses £100,000. 

 

However, starting from the 2023/24 tax year, the SA threshold will be raised to £150,000. It is important to note that taxpayers who meet any of the other SA criteria will still be obligated to file an SA return, regardless of their income level. The current additional criteria include: 

 

1. Liability to the high-income child benefit charge. 

 

2. Receipt of self-employment income exceeding £1,000. 

 

3. Receipt of untaxed income amounting to £2,500 or more. 

 

These SA criteria serve as administrative parameters employed by HMRC (HM Revenue and Customs) to determine whether a person should submit a tax return. However, it is essential to understand that these criteria are not explicitly outlined in legislation. 

 

Taxpayers can utilise HMRC's online tool to check whether they need to submit a tax return. For further details regarding the SA criteria, HMRC's self-assessment manual provides comprehensive information. In cases where taxpayers have a tax liability but do not fall within any of the SA criteria, it may be necessary to contact HMRC and arrange for the tax to be collected through PAYE using their tax code. 

 

HMRC is presently conducting a review of the operation of the SA criteria as part of its discussion document titled "Simplifying and modernising HMRC's Income Tax services through the tax administration framework." The consultation seeks feedback on various aspects, including taxpayers' understanding and navigation of the SA criteria, as well as opportunities for reform. The deadline for responding to the consultation is 7th June 2023.