PAYE AND SELF ASSESSMENT

Nichorj

Hello, can anyone help me please? My husband has worked for same company for 25 years, is an employee, not Director. He has always been PAYE and now earns over 100,000. Please can anyone explain why we now have to complete a self assessment tax return. He does not receive any dividends or shares and as I mentioned he is PAYE. We don’t have any other business and he does not earn any other income apart from his employment. Many thanks for any help.

Dazed_and_C0nfused

It is a HMRC requirement that anyone with taxable income over £100k completes a Self Assessment return.

Are you aware of the tapered Personal Allowance?

[Deleted User]

With income over £100000 one starts to lose their personal allowance at the rate of £1 for every two pounds over. NSI of £110000 for example, bring 10000 over, would result in the personal allowance being reduced by £5000. 

Reasons - because HMRC say so:

https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return

Who must send a tax return

You must send a tax return if, in the last tax year (6 April to 5 April), any of the following applied:

• you were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
• you were a partner in a business partnership
• you earned £100,000 or more

Jeremy535897

Indeed. HMRC may actually ask anyone to complete a tax return under section 8 Taxes Management Act 1970:

"(1)For the purpose of establishing the amounts in which a person is chargeable to income tax and capital gains tax for a year of assessment, and the amount payable by him by way of income tax for that year, he may be required by a notice given to him by an officer of the Board—

(a)to make and deliver to the officer, a return containing such information as may reasonably be required in pursuance of the notice, and

(b)to deliver with the return such accounts, statements and documents, relating to information contained in the return, as may reasonably be so required."

[Deleted User]

Hard to believe that the tapering of allowances above £100000 was 13 years ago - the equivalent of £71000 now. The personal allowance has doubled though.