HMRC has raised the income threshold for submission of tax returns from £100,000 to £150,000 and they are writing to individuals saying that tax returns are no longer required.
However, this is, unfortunately, sometimes incorrect. If you have rental income, untaxed income such as dividends, interest etc, or if you receive child benefit, are self employed or make large pension contributions you may still need to file a return.
HMRC introduced self-assessment to ensure accurate tax calculation and collection each year. This system covers income tax, National Insurance, and capital gains tax (CGT), primarily for individuals with income or asset sales not taxed at source.
Self-assessment applies to individuals who meet the following criteria:
- Self-employed individuals earning over £1,000
- Partners in a business partnership
- Individuals with an annual income of £150,000 or more
- Those claiming specific income tax or CGT reliefs
- Landlords earning rental income
- Individuals receiving earnings from tips and commissions
- Income from savings, investments, and dividends
- Overseas income recipients
- Those receiving child benefit with an income exceeding £60,000
- Non-residents with taxable UK income, including non-UK resident landlords