Stress-free high earner tax

If you earned more than £100k from your job in the 2022/23 tax year or HMRC has contacted you to let you know you need to file, then yes, you’ll need to file a tax return. From the 2023/24 tax year, the threshold rises to £150k. 

As you approach a 6-figure salary, you should learn how Income Tax affects you and what happens to your Personal Allowance (spoiler alert: you start losing it).

Tax efficiency is when you lawfully pay the least in tax that you need to. Some ways to be tax-efficient include saving more in your pension, asking for non-cash bonuses, or investing in start-ups. Find more tax-efficient investments here.

You lose £1 of your Personal Allowance every £2 over £100k you earn. Sadly, this means you’ll be paying 60% tax but don’t panic. You can avoid losing your earnings by being more tax-efficient.

HMRC have announced a change for PAYE high earners. If you earn less than £150k from your PAYE salary, you will not have to file a tax return in the 2023/24 tax year.  Remember, if you have other forms of income or capital gains, you may still need to file.

The rule previously was that anyone earning a PAYE income over £100,000 had to file a tax return. Yep… even if tax is taken out of your pay before you receive it.

Now, for the 2023/2024 tax year, this is no longer the case. HMRC increased the threshold to people earning over £150,000. So, those of you who earned £150,000 or more in the 23/24 tax year, you’ll still need to file a Self Assessment tax return in January 2025.