Accountants Chester – Tax Tip No. 61

Even if you pay all your tax through PAYE, you may still need to complete a Self-Assessment tax return if you are a high earner. For 2022/23 and earlier tax years, this is the case if your income is more than £100,000. However, for 2023/24 onwards, the trigger threshold is increased to £150,000.

Unless you have to complete a self-assessment tax return for another reason, if you are taxed under PAYE and your income is between £100,000 and £150,000, you will need to file a tax return for 2022/23 but will not need to do so for 2023/24 onwards. You must file your 2022/23 tax return online by 31 January 2024. It is important that you do this, as HMRC will charge you a late filing penalty of £100 if you miss the deadline, even if you have no tax to pay.

Accountants Chester | Reasons you may need to file a return

Even if you are employed and your income is below the Self-Assessment trigger threshold, you may still need to file a Self-Assessment tax return. This could be because you also had income of more than £1,000 from self-employment or because you were a partner in a business partnership. You may also need to file a Self-Assessment tax return if:

  • you receive income of more than £1,000 from renting out properties;
  • you receive dividend income in excess of the dividend allowance;
  • you receive interest that is taxable;
  • you have foreign income to report;
  • you realise chargeable gains in the tax year; or
  • you are liable to pay the high-income child benefit charge.

Remember that the additional rate threshold has been reduced from £150,000 to £125,140 from 2023/24. If your income is between £125,140 and £150,000, you will no longer receive a personal savings allowance as this is only available to higher and basic rate taxpayers. The allowance is set at £500 for higher rate taxpayers. If you were previously entitled to the allowance and you received savings interest of less than £500, you would not have had to pay tax on that interest. However, if you are now an additional rate taxpayer, any savings interest (other than that in a tax-free wrapper such as an ISA) is taxable and you will need to report it to HMRC.

Accountants Chester | Telling HMRC

If you think that you no longer need to file a Self-Assessment return because your income is below the new threshold and you have nothing else to report, or if you have retired, you will need to tell HMRC. You can do this online, either using HMRC’s digital assistant or by completing an online form. You can also write to HMRC or tell them by phone (although it should be noted that the Self-Assessment helpline is closed until 4 September).

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You likely need to file a Self Assessment tax return if any of the following apply to you in the last tax year (6 April to 5 April):

  • Self-employment: You were self-employed and earned more than £1,000 (before allowable expenses).
  • Rental income: You earned more than £2,500 from renting out a property (contact HMRC if you earned between £1,000 and £2,500).
  • Other untaxed income: You earned over £2,500 in other untaxed income (e.g., tips, commissions, certain COVID-19 support payments).
  • Investment income: You earned over £10,000 from savings, investments, or dividends (before tax).
  • Capital Gains Tax: You need to pay Capital Gains Tax (e.g., from selling a second home or shares).
  • Higher income: Your income exceeded £100,000.
  • HMRC request: HMRC has specifically asked you to file a Self Assessment.

Not sure? It's best to double-check! You have these options:

Important Note: Even if you usually pay tax through PAYE, you might still need to file a Self Assessment in certain circumstances.

Self-Assessment Accountants Chester

No, it's not mandatory for everyone. However, you must file a tax return (known as a Self Assessment tax return) if any of the following apply:

  • Self-employed earnings: You were self-employed and earned over £1,000 (before allowable expenses).
  • Partnership income: You were a partner in a business partnership.
  • Other untaxed income: You received untaxed income from sources like:
    • Rental property
    • Savings, investments, and dividends
    • Foreign income
    • Some COVID-19 support payments
  • Taxable income over £100,000
  • You need to claim Child Benefit and your income is over £50,000

Important Notes:

  • HMRC (the UK's tax authority) may ask you to file a tax return even if none of the above situations apply to you.
  • There are deadlines and potential penalties for late filing, so it's best to check if you need to submit a return.

Accountants Chester can help you determine if you need to file, guide you through the Self Assessment process, and ensure you claim all the deductions you're entitled to.

Helpful resources:

Self-Assessment Accountants Chester

No, not everyone in the UK has to file a Self Assessment tax return. Here's a general breakdown of who typically needs to file:

  • Self-employed individuals: If you run your own business or are a sole trader with earnings over £1,000.
  • Partners in a business partnership: All partners generally need to file individually.
  • Landlords with rental income: If your property income exceeds £2,500 a year (or £1,000 if you rent out a room in your home).
  • Income over £100,000: You'll need to file a Self Assessment regardless of other income sources.
  • Other untaxed income sources: This includes certain types of savings interest, investment income, foreign income, tips, or commission.

Why might you need Accountants Chester?

  • Complex tax situations: An accountant can help if you have multiple income sources or need assistance with tax calculations and deductions.
  • Time-saving: Accountants can efficiently handle your tax returns and optimise your tax situation.
  • Peace of mind: They ensure your taxes are correct and you avoid HMRC penalties.

Self-Assessment Accountants Chester

Failing to submit your Self Assessment tax return on time has serious consequences in the UK. Here's what could happen:

  • Automatic Penalties: You'll face an immediate £100 fine, even if you don't end up owing any tax. Penalties increase the longer you delay filing.
  • Interest Charges: HMRC will charge interest on any unpaid tax.
  • Estimated Tax Bills: HMRC may issue you an estimated tax bill, which you'll be obligated to pay even if their estimate is inaccurate.
  • Further HMRC Action: In extreme cases, HMRC could take legal action or even initiate bankruptcy proceedings.

Important Deadlines:

  • Paper Returns: 31st October 2023 (for the 2022/23 tax year)
  • Online Returns: 31st January 2024 (for the 2022/23 tax year)

Reasonable Excuses

You might be able to appeal penalties if you have a valid reason for the late submission, such as:

  • Serious illness
  • Death of a close family member
  • Unforeseeable disruptions (e.g., flood or fire damage)

It's crucial to act fast, even if you're late. If you're unsure of your obligations or need help filing, Accountants Chester can assist you in minimising penalties and ensuring compliance.

For more information, visit the official HMRC website:

Self-Assessment Accountants Chester

Whether you need to file a Self Assessment tax return for 2023-2024 depends on your income and circumstances. Here's why it's best to check:

  • Self-employment: If you earned any self-employed income over £1,000, you'll need to file.
  • Other untaxed income: This includes things like rental income, significant savings interest, or certain dividends.
  • Additional situations: There are other reasons you might need to file, such as being a company director or needing to claim certain tax reliefs.

Where to get a definitive answer:

  • HMRC Website: The government's website has the most comprehensive guidance on who needs to file a Self-Assessment:
  • Accountant: Accountants Chester can give you tailored advice on your specific situation.

Self-Assessment Accountants Chester

Whether you need to file a Self Assessment tax return for 2024 depends on your income sources and circumstances. Here's a breakdown of the most common reasons to file:

  • Self-employment: If you run your own business or freelance, you almost always need to file a Self Assessment.
  • Rental income: Landlords with rental income above £1,000 usually need to file.
  • Investment income: Significant dividends, interest from savings (above your allowances), or capital gains from selling assets could trigger the need to file.
  • Other income sources: This includes foreign income, certain untaxed benefits, and more.
  • HMRC request: HMRC may specifically ask you to file a Self Assessment.

Unsure? Contact Accountants Chester for a quote! Accountants are experts in tax regulations. They can:

  • Help you determine if you need to file a Self Assessment
  • Handle the filing process for you, ensuring accuracy and meeting deadlines
  • Advise on maximising deductions and minimising your tax burden

Self-Assessment Accountants Chester

From the 2023/24 tax year, there's a significant change to the self-assessment threshold. You'll generally only need to file a Self Assessment tax return if:

  • Your total income exceeds £150,000, and this income was not all taxed through PAYE.
  • You have other sources of untaxed income, such as:
    • Self-employment income over £1,000
    • Rental income
    • Income from dividends
    • Foreign income

Important Notes:

  • Even if your income is below £150,000, you might still need to file a Self Assessment if you are liable for the High Income Child Benefit Charge.
  • The threshold applies to your total income from all sources.

For More Information: Visit the official HMRC website for the most up-to-date Self Assessment information:

Why Choose Accountant Chester? Accountants can help streamline the Self Assessment process, identify potential tax savings, and ensure you're fully compliant with HMRC regulations.

Self-Assessment Accountants Chester

You must register for Self Assessment and submit a tax return in the UK if:

  • Self-employed earnings: Your trading profits exceed £1,000 in a tax year.
  • Rental income: You earn over £2,500 in rental income (you'll need to contact HMRC if it's between £1,000 and £2,500).
  • Other untaxed income: You earn more than £2,500 from other untaxed sources (e.g., tips, commission).

Important Notes:

  • You might still need to file a Self Assessment even if you don't exceed these thresholds in certain situations, such as having income from abroad, needing to report Capital Gains Tax, or if your income is over £100,000.
  • The standard Personal Allowance for 2023/24 is £12,570. This is the amount you can generally earn before Income Tax.
  • Allowable expenses can reduce your taxable self-employed income.

Confused? Accountants Chester can provide personalised advice on your specific tax situation.

For more details, visit the official sources:

Self-Assessment Accountants Chester

Not necessarily, but it depends on a few things:

  • Child Benefit: If you or your partner earns over £50,000 annually and you claim Child Benefit, you'll need to register for Self Assessment to repay some of the Child Benefit via the High Income Child Benefit Tax Charge.
  • Self-employment: If any of your income comes from self-employment, you must file a Self Assessment regardless of how much you earn.
  • Other income: You'll likely need to file a Self Assessment if you have significant income from sources like:
    • Rental properties
    • Investments or dividends
    • Foreign income

Even if you're unsure, consider these reasons to file a Self Assessment:

  • Potential tax refund: You might be owed a tax refund if you overpaid throughout the year.
  • Tax relief: Filing can help you claim tax relief on things like pension contributions or business expenses.
  • Avoid penalties: HMRC can issue fines for late or missed Self Assessment submissions.

Need help? Accountants Chester can help you determine if you need to file a Self Assessment and assist you with the process.

Self-Assessment Accountants Chester

  • You're self-employed: Sole traders and freelancers must report their income and expenses.
  • You have additional untaxed income: This includes rental income, significant savings interest, foreign income, or profits from selling assets (like shares or a second home).
  • You need to claim tax relief: Business expenses or capital allowances can reduce your tax bill.
  • You owe tax: Self Assessment is how you settle up with HMRC for Income Tax, National Insurance, or Capital Gains Tax.

Not sure if this applies to you? Accountants Chester can offer personalised advice. They'll help you understand your specific situation and handle the tax return if needed.

Self-Assessment Accountants Chester

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The information contained in this blog is for general guidance only. It does not constitute professional advice and should not be relied upon as such. Always seek tailored advice from a qualified accountant regarding your specific circumstances.