Tax return on income over £100k

[ScandiNoirNuit]

I am in the fortunate position of being promoted with a large jump in salary. Salary will be £95k, plus £8k car allowance and around £15k bonus. I will be seeking to bring this total £118k under £100k through salary sacrifice pension contributions to avoid the ludicrous 60% tax trap between £100-125k. I am presuming I will still need to complete a tax return though, even though salary and net income below £100k?

Until this year, you would have to complete a tax return for a PAYE income over £100k, but HMRC has now upped the threshold to £150k

Either way, if it’s all PAYE income, you don’t need to do one until they write to you to tell you that you now have to do it. You don’t have to do anything proactively until they get in touch unless you have income additional to your PAYE role (rental, investment interest etc etc)

If this is your only income, then no you do not need to fill in a SA.
Your taxable pay is <£100k which is the threshold.
Any P11D benefits you need to add on?

Have your read this?
https://www.gov.uk/guidance/adjusted-net-income#what-is-adjusted-net-income

Thank you @Marmight, that is really helpful!

@tenbob I wasn’t aware of the threshold increasing to £150k? Is that for completing returns?

glad that it doesn’t seem an issue for this year at least.

Its not £150k @tenbob. Please see the link to the gov.uk website i posted upthread. The reason you have to complete a SA is that you lose your personal allowance after £100k.
Also it is your responsibility to complete a self assessment and do not wait for them to write to you.
There is no threshold that kicks in at £150k now.

Incorrect

https://www.cowgills.co.uk/news/self-assessment-threshold-rises-to-150k/#:~:text=Last%20week%2C%20HMRC%20announced%20that,£100%2C000%20to%20£150%2C000.

Why do people insist on wading in on these threads that do not have all the information

The amount of incorrect advice given on threads like this is astounding

@PickledPurplePickle
I hope that’s aimed at @Marmight and not me..!

I'm right for the tax year 2022/2023 which has a SA deadline of 31 January 2024.
You're right for 2023/2024 tax year but they only write to you if you are currently SA registered and you can stop doing an SA.

So basically everything I said in my first post which you then told me was wrong?

plus some added nonsense about OP needing to be proactive about needing to do a SA..?

As pp said, it’s weird when people wade into these threads not knowing much about the subject. It’s even weirder when they try and correct those who have posted the right information…

Contact HMRC and ask. If you haven't done a SA before, they won't automatically write to you straightaway.
If you do need to fill in a SA thought, they will catch up at some point same year or a few years later and if your personal tax allowance was not applicable in your circumstances, you will have to pay back £X in tax plus, potentially, penalties for late filing and late payment.
It's a really annoying situation if you are PAYE only where most people expect their tax to be deducted at source and wouldn't know about these thresholds.
Speaking from experience!
At least you are aware of potential tax implications so that's a good place to be in.
Better to know now and get it done and over with.
Or get an appointment with an accountant for personalised advice.

Wow. it used to be when you hit the 40% tax bracket you started self assessment. That threshold has gone up a bit (but salaries have not!)

You don’t need to contact them.

There is a very simple checker tool on their website, which you can complete after the end of the tax year in which your £100k salary kicks in

https://www.gov.uk/check-if-you-need-tax-return

I didn't say that the OP needed to 'proactively' complete a SA.

"If this is your only income, then no you do not need to fill in a SA.
Your taxable pay is <£100k which is the threshold."

Over and out as the OP has the answers they need

My only input is it is very easy for your tax code to get in a mess. So if you do a tax return and there is tax to pay it is worth just paying it to try and keep your tax calculation as simple as possible!

You may or may not have to, but if you do you know you have done everything correctly. You have a bonus, car allowance and are paying extra pension contributions. You may also have interest from savings, etc, it can soon get a bit difficult to cover it all in a letter. If you are already doing an SA I would continue doing it.

When I was getting a car allowance and expenses the company continually mucked up my P11D and I had to correct it through my SA every year.

This. We've had a total nightmare with tax codes over the past couple of years and redundancy payments/ bonuses and HMRC clawing money back via the tax code but then taking 4 months to change it again so we have overpaid.

I like doing an SA every year as it is a chance to double check HMRC's figures and correct any over/ underpayments. It really doesn't take that long either.

Also worth noting that, regardless of your salary, if you make charitable donations or pension contributions that are not deducted from income at source, you should do a SA return to make sure you get the right tax relief on both. You can do both these things by phone, though the phone service for PAYE seems to be being phased out and replaced by an HMRC web chat facility. But it’s often as easy and quicker to do a SA tax return, and that’ll pick up any mistakes in tax codes through the year too!

It depends on how you make the pension contributions.

If they are deducted from your gross taxable wage via your employer's payslips, then no, your taxable gross will be under £100k.

But if you make the pension contributions separately or they're paid out of your net wages, then your gross taxable will still be over £100k (as per P60) and you'd need to claim separately for the tax relief on the pensions, usually by the SA return, but also possibly by your online personal tax account.