I earn £110,000 a year but HMRC have not contacted me to request a tax return. Do I have to make one?

I earn £110,000 a year and have had to do a tax return since my salary surpassed the £100,000 level.

I understand this has changed and people now only have to file a tax return if they earn more than £150,000.

I have not received a letter from HMRC saying that I have to do a tax return this year and that all my earnings are PAYE. Can I avoid doing one or do I risk getting fined?

Angharad Carrick from This is Money says: If you don’t earn any income outside of your salary, it may seem strange that you also have to file a tax return.

Previously, people earning more than £100,000 a year on PAYE had to file a self-assessment tax return.

This is because once you earn more than £100,000, you start to lose your tax-free personal allowance of £12,570. Your personal allowance is reduced by £1 for every £2 you earn above £100,000, so your allowance is zero if your income is £125,140 or more.

Filing taxes helped ensure your taxes were calculated correctly.

In April 2023, the threshold needed to complete a tax return increased, meaning only those who earned £150,000 or more on PAYE had to complete one.

Those whose income comes solely from PAYE and is less than £150,000, like you, no longer need to file a self-assessment tax return.

Confusingly, you will still lose eligibility for the personal allowance once you start earning more than £100,000, but you won’t have to file a tax return.

Now that your PAYE income is below this threshold, you do not have to submit one based on your salary and you have not received anything from HMRC indicating that you must do so.

However, there are other circumstances that may mean you need to carry out a self-assessment. You may also want to file one as a precaution.

We asked two tax experts about who should file a tax return and when someone might be at risk of a penalty.

Rachael Griffin, tax and financial planning expert at Quilter, says: For those earning £110,000 a year through PAYE, the new rules are great news. Under the old rules he would have been required to file a tax return because his income was over £100,000.

Under the new threshold, you are no longer required to do this, as long as your income remains below £150,000 and there are no other complicating factors, such as additional sources of income or significant tax-deductible expenses.

When you need to file a tax return

Angharad Carrick says: He says all his income is on PAYE, so he won’t have to worry about filing taxes this year.

For those earning less than £150,000 but earning investment income or rental income, you will still need to file a tax return.

You must file a tax return if, in the last tax year, any of the following applied:

• You were self-employed as a “sole trader” and earned over £1,000 (before deducting anything you can claim tax relief on)

• you were a partner in a business company

• had a total taxable income of more than £150,000

• You had to pay capital gains tax when you sold or “disposed” of something that increased in value

You may also need to submit a tax return if you have non-taxable income, such as:

• money for renting a property

• income from savings, investments and dividends

Are you at risk of receiving a fine?

Lucie Spencer, director of financial planning at Evelyn Partners, says: After your 2022/23 tax return, if the only income you declared was PAYE, then you should have received an exit letter from HMRC informing you that you no longer need to complete a return.

If you have not received this letter from them, I recommend that you contact them to confirm, otherwise you could risk receiving a fine for not filing a return.

Or there could be other reasons why you need to complete a return outside of PAYE, for example paying the high-income child benefit charge.

Rachael Griffin adds: It is important to remember that while HMRC may not always send reminders, it is still their responsibility to ensure compliance with tax rules.

Failure to file the required tax return may result in penalties, which may increase the longer the return is overdue. Therefore, staying informed about changes in tax laws and understanding your obligations is essential.

Even if you don’t need to file a self-assessment tax return, the process can be beneficial.

It allows you to review your tax affairs comprehensively, ensuring that all your income and allowances are reported correctly.

This can help you avoid unexpected tax bills in the future and ensure you are taking advantage of available tax breaks.

An HMRC spokesperson said: Customers earning up to £150,000 and paying tax through PAYE will not need to complete a tax return for the 2023 to 2024 tax year unless they have other sources of tax-free income.

If a client has received a filing notice and believes they no longer need to file a tax return due to the change in this criteria, they must notify HMRC to have the notice withdrawn.

A return must be lodged unless HMRC has withdrawn the notice.

Angharad Carrick says: I would err on the side of caution and contact HMRC to confirm that you no longer need to pay a tax return.

While it is highly unlikely that you will need to file a tax return, HMRC can give you peace of mind and advise you based on your circumstances.