The number of people paying income tax at 40% or above will reach 7.8 million by 2027/28, according to research published by the Institute for Fiscal Studies (IFS). This represents one in five taxpayers and one in seven of the adult population – a near-quadrupling of the share of adults paying higher rates since the early 1990s, the IFS said. It stated that the six-year freez ...
Self Assessment Changes - Threshold increased to £150,000
From the 2023/24 tax year onwards, the self assessment income registration threshold for taxpayers taxed through PAYE only will rise from £100,000 to £150,000. HMRC will issue self assessment “exit letters” as from 2023/24 to those individuals whose income falls below £150,000 for 2022/23 and do not meet any of the other criteria, such as: being in receipt of foreign income ...
Number of early self assessment filers doubles in five years
The number of self assessment taxpayers filing their tax return on the first day of the tax year has more than doubled since 2018, HMRC has revealed. More than 77,500 customers submitted their tax return for the 2022/23 tax year on 6 April 2023, compared to almost 37,000 customers on 6 April 2018. The deadline to file tax returns for the 2022/23 tax year is 31 January 2024 an ...
HMRC plans points-based penalties for self assessment
The current standard £100 fine for late filing of self assessment tax returns is due to be changed to a points-based system from 2026. HMRC has confirmed that the penalty system will be reformed in a bid to curb abuse of the self assessment system and support taxpayers who make occasional mistakes. The planned penalty reforms for paying tax late will be based on the length of ...
Pension Tax Limits – Budget Changes
In the recent budget (delivered on 15 March 2023), the Chancellor, Jeremy Hunt, announced a number of measures that are intended to increase “growth” and support efforts to (a) encourage inactive individuals to return to work, in particular those aged 50 and above, and (b) remove incentives to reduce hours or leave the labour market altogether. Of particular interest are the t ...
HMRC urges eligible couples to claim Marriage Allowance
HMRC has reminded married couples eligible for the Marriage Allowance to make use of the tax relief. Over 2.1 million couples currently benefit from the Allowance, HMRC said. Married couples could save up to £252 a year, it added. Eligible couples are those who are married or in a registered civil partnership; one spouse or partner does not pay income tax, or their income is ...
Limited Company - 2023/24 Considerations
Directors’ remuneration – with the new financial and tax year starting in April, it is time to consider the best level of salary for you to process for the 2023/24 tax year.
HMRC targeting Airbnb landlords
HMRC have announced that they are looking closely at landlords operating short-term property lettings, which are typically booked through online property sites such as Airbnb, Booking.com, VRBO and Holiday Lettings. This is in an attempt to “stamp out” what HMRC sees as tax evasion within this sector. HMRC is writing to ‘a small number of customers who might have earned income ...
Bank of England raises interest rates to highest level in 14 years
The Bank of England (BoE) has raised the base rate of interest to the highest level in 14 years. The BoE raised interest rates for the tenth consecutive time on 2 February with a half point increase taking the base rate from 3.5% to 4%. The decision was taken after the Monetary Policy Committee (MPC) voted by a majority of seven to two to increase the base rate by 0.5%. The ...
MTD - ITSA Delayed
The Government has announced that making tax digital for income tax (MTD ITSA) for the self-employed and landlords will be delayed until April 2026. The new timetable provides that a person will be required to use MTD for IT if they are self-employed or a landlord: from April 2026, if their annual business or property income is more than £50,000; and from April 2027, if th ...