Tax simplification is a good thing, but sometimes HMRC's moves in this direction don't necessarily make things easier for everybody, and can in fact cause quite a deal of stress. Two upcoming rule tweaks are textbook examples.
Investors with high incomes should not get too excited about the changes to the income threshold above which employees must submit a tax return. Previously set at £100,000, this increased to £150,000 for 2023-24. In theory, employees earning below this level will not need to submit a tax return by 31 January 2025 (as long as they have no other income). For the next tax year, starting in April 2024 and with a tax return deadline of 31 January 2026, the income threshold will be dropped entirely, as announced by chancellor Jeremy Hunt in last year’s Autumn Statement.
The idea of not having to file a return is certainly appealing. But the Association of Taxation Technicians (ATT) warns that it could result in people inadvertently paying the wrong amount or missing out on tax reliefs.