HMRC warns UK households earning £50,000 or more over 'nasty surprise' letter

HMRC warns UK households earning £50,000 or more over 'nasty surprise' letter
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UK households earning over £50,000 have been issued an urgent two week warning or they could face a "nasty tax surprise" from HMRC. HMRC has reminded taxpayers that returns must be submitted online by midnight on January 31, 2025.

Dean Butler, Managing Director for Retail Direct at Standard Life, part of Phoenix Group said: "This year, make sure to avoid falling into the Child Benefit gap – from the current tax year, you’ll need to earn £60,000 to pay the High Income Child Benefit Charge but for the 2023/24 year it’s still £50,000. Make sure to avoid any nasty tax surprises further down the line.”

He added: "Tax returns aren’t known for being fun, but it’s important to understand what’s required and file it on time to avoid any penalties which can be costly – last year, HMRC collected a record £220 million in late-filing fines."

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Another change this year is that anyone earning below £150,000 does not need to file self assessment if their income is purely PAYE, but most accountants are advising this cohort to continue to file a tax return, particularly as they are likely to be making pension contributions.

HMRC has confirmed that 7.4m self assessment taxpayers have filed their tax returns so far, but millions are still putting off the annual tax chore. Myrtle Lloyd, HMRC director general for customer services, said: "The self assessment deadline is fast approaching, don’t leave completing your tax return to the last minute.

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"There is plenty of support available to make filing as straightforward as possible, just search “help with self assessment” on gov.uk to find out more." Mr Butler said: “Self-assessment is a system HMRC uses to collect Income Tax. If you are employed, your income tax is usually automatically deducted from your wages by your employer, but if you are self-employed or receive any other income, you will need to submit a self-assessment tax return each year to pay income tax and National Insurance."

He said: “Make sure to check you tax code is correct before submitting your self-assessment. If you need assistance with your self-assessment, then you can contact HMRC, or find an accountant accredited in the UK to help, which can be relatively inexpensive. You can also appoint a relative or friend to fill in and send your tax return on your behalf."