Tax Return Thresholds Are Changing – Here’s What You Need to Know
If you’ve ever wondered whether you need to do a tax return, you’re not alone – and the good news is, HMRC is making things a bit simpler for some people.
The government has just announced it’s raising the income thresholds that decide whether certain individuals need to file a Self Assessment tax return. Basically, if your income from self-employment, property, or other sources is on the lower side, you might be able to skip the paperwork altogether.
Here’s a quick breakdown of what’s changing:
Self-Employed Traders
Until now, if you were self-employed and earned over £1,000 in turnover (not profit), you had to register for Self Assessment. That limit is going up to £3,000, but not all at once – the plan is to reach that figure by the end of 2029. So, there’s a bit of a runway here.
Property Income
If you earn money from renting out property, the rules are also being relaxed. Previously, if your profit from rental income was over £2,500, you had to do a tax return. That threshold is rising to £3,000. (Just a heads-up – if your total gross rental income hits £10,000 or more, you’ll still need to report it, even if your profit is below the new threshold.)
Other Taxable Income
Got a bit of extra income from things like interest, dividends, or casual work? The reporting threshold for that’s also going up – from £2,500 to £3,000.
But Wait – You Might Still Owe Tax
Even if you don’t need to fill in a full tax return anymore, you might still have some tax to pay. HMRC is planning to roll out a new, simplified online system to help people in this position pay what they owe without the faff of a full Self Assessment. Details are coming later this year.
In a nutshell:
If your side hustle, rental, or extra income is modest, you might soon be able to ditch the tax return. But don’t ignore it completely – tax may still be due, and HMRC will still want their cut. As always, check your personal situation or speak to an accountant if you’re not sure.
Need help with self assessment or a tax return?
We’ll tell you what you can claim, what to watch for, and how to keep it all above board.