UK tax minister James Murray has confirmed plans to raise the income tax self assessment reporting threshold for trading income from £1,000 ($1,300) to £3,000 within the current parliament.
This move could streamline the tax system, according to audit, tax and business advisory firm Blick Rothenberg.
The initiative builds upon enhancements made in October 2024, which included a dedicated line option for agents to track repayment progress and the introduction of an agent webchat service.
The change is expected to exempt approximately 300,000 taxpayers, including those with side hustles, from filing requirements.
HM Revenue & Customs (HMRC) is set to introduce a new service by the end of this month, providing a specialised escalation route for agents handling Self Assessment and PAYE queries older than four weeks.
A dedicated team will adopt a ‘once and done’ approach, ensuring comprehensive case management and consistent communication with agents.
These changes are part of a broader effort to improve the efficiency of tax administration in the UK.
This adjustment aligns with new thresholds for property and other taxable incomes.
Of the 300,000 customers, about 90,000 individuals will not be required to report their trading income to HMRC due to no tax liability, while others with tax obligations will have access to a simplified online service for reporting.
Blick Rothenberg director Robert Salter emphasised the importance of clear communication between HMRC and individuals impacted by these changes, ensuring they are aware of any continuing tax reporting obligations.
He said: “HMRC must have some type of auditing and review process in place, so that it can check whether any individuals who are being taken out of Self-Assessment, should subsequently be reintroduced into the system.”
“Although some self-employed individuals with income that is below the personal tax allowance of £12,570 per annum may not have any income taxes to pay to HMRC and do not need to be within the Self-Assessment system, they should consider whether they wish to make voluntary National Insurance Contributions (NICs) to HMRC at a rate of £3.45 per week, to protect their state pension accrual position.”
In February 2025, concerns were raised when HMRC suspected a potential £325m underpayment in Inheritance Tax by affluent individuals, as reported by UHY Hacker Young.
