Income Reporting Thresholds Increased for Better Financial Management

The new £3,000 threshold

As part of the Spring 2025 initiative focused on tax simplification and modernization, the UK government has announced adjustments to the Income Tax Self-Assessment (ITSA) thresholds.

These changes will unify and raise the reporting limits for income from self-employment, property, and other taxable sources to £3,000 per individual. The implementation is expected to occur during the current parliamentary term.

Easing the load

This policy aims to ease the administrative load on taxpayers and streamline the reporting process. With the new threshold in place, approximately 300,000 individuals will no longer need to file a se

lf-assessment return if their income remains below the updated limit.

Among them, around 90,000 people are projected to owe no tax and will not be required to report their business income to HMRC going forward.

And a new digital system

Additionally, HMRC has been working on a digital system that allows individuals to report their income and expenses more regularly throughout the year.

Instead of submitting a single annual Self-Assessment tax return, users will now provide updates every quarter, followed by a final summary to confirm the year’s figures.

This approach is intended to simplify the process, enhance accuracy, and support better tax compliance.

And a new digital platform

For those whose income is under the threshold but who still have tax obligations, a new digital platform is being developed to offer a more straightforward alternative to the traditional self-assessment process. However, individuals will still have the choice to continue using self-assessment if they prefer.

However you choose to proceed, Naylor Accountancy Services will be by your side every step of the way. 

If you have any questions or need further information, please don't hesitate to contact us. You can also check out our website for more information on services, events, or book a free consultation to discuss how we can support your business needs. We're here to help!