Background
An individual must notify H M Revenue & Customs (‘HMRC’) by 5 October following the end of a tax year if they have a liability to tax and are not already registered for Self-Assessment. Failure to notify by this date can result in penalties.
Anyone who has a new source of income for the year ended 5 April 2023 and is not already registered for Self-Assessment must therefore register with HMRC by next Thursday, 5 October 2023.
Detail
Individuals not already registered for Self-Assessment and who may have started to earn new income that has not been subjected to tax at source must register with HMRC by 5 October following the end of the tax year. Examples of new sources of income could include self-employment, joining a partnership, additional freelance work, rental income, selling goods online, crypto currency transactions and sales of capital assets.
Examples of individuals who may need to take action by 5 October are as follows:
- where casual income (e.g. from online selling) exceeds £1,000 in a tax year;
- where savings and investment income is over £1,000 for a basic rate taxpayer (£500 for a higher rate taxpayer);
- where dividend income is over £2,000 in 2022/23 (note this drops to £1,000 for 2023/24);
- where rental income receipts are over £2,500 in a tax year;
- where total income before tax is over £100,000;
- where assets worth £12,300 or more in 2022/23 (note this reduces to £6,000 for 2023/24 and to £3,000 for 2024/25) have been given away or sold;
- where income for them or their partner is over £50,000 and they are in receipt of child benefit.
HMRC do now accept that becoming a director does not require an individual to register for Self-Assessment for that reason alone.
If you would like further information regarding the criteria for Self-Assessment or if you would like assistance in registering for Self-Assessment, please contact our Tax Director, Jenny Marks.
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