Employment

Why do I need to file a tax return, if I'm on PAYE and earn over £100,000?

From the tax year 2023 - 2024, the income threshold will increase to £150,000. So you don't need to. However, some would still recommend you file a tax return if you've earned over £100,000. This is because it's more likely that you would be due a tax rebate as those on PAYE are usually overtaxed at source.

It's also likely you'll lose part or all of your personal allowance of £12,570. At present, you'll lose £1 for every £2 earned. This means if you earn over £125,140, you lose your personal allowance. Of course, there are ways to avoid losing you're personal allowance e.g. through a pension scheme.

Remember if you have not filed a tax return before, you'll need to register with HMRC by 5th October the following the end of the tax year you earned the income.

What expenses can I claim as an employee?

As an employee and whatever your income, you may be entitled to claim tax relief on costs incurred wholly and exclusively for the purposes of work.

If your employer has not reimbursed you, you could claim for:

• clothing and tools - you cannot claim the initial cost but can claim for replacing or repairing;
• vehicle use - if you use your own vehicle, you may claim your business mileage. If you use a company vehicle, you may claim your actual costs e.g. for fuel;
• travel costs - you can claim for things like transport costs, food and drink, hotel stays, parking fees;
• professional fees and subscriptions - you can only claim for this if you need it to do your job;
• working from home - you may claim £6 per week or claim the actual costs for things like phone calls, gas and electric;
• equipment - you can claim for equipment such as a computer that's needed for work as HMRC qualifies this as a type of capital expense. This does not include cars, vans or bicycles.

Should you wish to sign up for our services, please click below to fill our onboarding form or tax return form and our accountant will be in touch within two working days.