Self Assessment New Rules

Who needs to file, recent changes to thresholds, HICBC rules, key deadlines and the penalties for non-compliance.

Who Must Complete a Self Assessment Return?

You must register for Self Assessment and file a tax return if, in the last tax year, any of the following applied: • You were self-employed as a sole trader with income over £1,000 • You were a partner in a business partnership • You earned more than £100,000 total income • You received untaxed income over £2,500 (e.g. rental income) • You received foreign income • You claimed Child Benefit and you or your partner earned over £60,000 • You had capital gains above the annual exempt amount • You received income from a trust or estate • You were a minister of religion • HMRC sent you a notice to complete a return

New £3,000 Threshold for PAYE Employees

From 2025/26 onwards, HMRC has changed the rules for PAYE employees with small amounts of additional income: • Previously, employees with under-collected tax of up to £3,000 had it collected through their PAYE tax code • This "coding out" threshold remains at £3,000 for most employees • However, HMRC increasingly requires Self Assessment returns for employees with side income or multiple income sources above certain levels If HMRC contacts you asking you to register, you must do so even if you believe your affairs are straightforward.

High Income Child Benefit Charge

The High Income Child Benefit Charge (HICBC) applies if: • You or your partner received Child Benefit, AND • Either of you had adjusted net income over £60,000 The charge is 1% of the Child Benefit received for every £200 of income over £60,000. If income exceeds £80,000, the charge equals 100% of the benefit — effectively eliminating it. From 6 April 2024, the threshold increased from £50,000 to £60,000, and the taper extends to £80,000. You must file a Self Assessment return to pay the HICBC.

Key Deadlines 2024/25

The critical Self Assessment deadlines for the 2024/25 tax year: • 5 October 2025: Deadline to register for Self Assessment (if new) • 31 October 2025: Paper return filing deadline • 31 January 2026: Online return filing deadline • 31 January 2026: Pay your tax bill (balancing payment + 1st payment on account) • 31 July 2026: 2nd payment on account Payments on account are advance payments towards your next year's tax bill — each is 50% of the previous year's liability.

Penalties for Late Filing and Payment

HMRC charges automatic penalties: Late filing: • 1 day late: £100 automatic penalty • 3 months late: additional £10/day (up to £900) • 6 months late: 5% of tax owed or £300 (whichever is greater) • 12 months late: further 5% or £300 plus potential higher penalties Late payment: • 30 days late: 5% surcharge • 6 months late: additional 5% surcharge • 12 months late: another 5% surcharge • Interest also accrues daily on unpaid tax

What You Can Claim on Self Assessment

When completing your return, you can claim deductions and reliefs including: • Business expenses for self-employed income • Pension contributions (extend basic rate tax band) • Gift Aid donations (extend basic rate tax band) • Marriage Allowance • Blind Person's Allowance • Employment expenses (if not reimbursed by employer) • Interest on qualifying loans • Foreign tax credit relief Keep records for at least 5 years after the 31 January filing deadline, or 6 years if you're a company.

Key 2024/25 Deadlines

5 Oct 2025

31 Oct 2025

Paper return deadline

31 Jan 2026

Online return + tax payment

31 Jul 2026

2nd payment on account

A late filing penalty of £100 applies automatically from day one — even if no tax is owed.

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