Mike Ambery, Retirement Savings Director at Standard Life, part of Phoenix Group, comments: “The deadline for filing online self-assessment tax returns is just two weeks away, and many self-employed and higher earners will be feeling under pressure to act. While tax returns certainly aren’t known for being fun, not doing them on time can be surprisingly costly, with HMRC charging a £100 fine for those who miss the initial deadline alone. That’s why it’s vital that people don’t leave it too late, and make sure they understand what’s required of them and have everything they need now.
“With the recent Autumn Budget offering no relief on frozen tax thresholds or key ‘cliff edges’ like the £60,000 trigger for the High Income Child Benefit Charge (HICBC), more people may now be required to complete a self-assessment tax return for the first time as their wages rise. This is particularly relevant for families claiming Child Benefit, where even a small increase in income can leave individuals and households subject to the HICBC and create the obligation to submit a return.
“It’s also worth remembering that for higher earners, completing a self-assessment isn’t just about meeting tax obligations - it can be an opportunity to check you’re claiming all the pension tax relief you’re entitled to. Taking the time to review your position now can help avoid nasty tax surprises and ensure you’re not missing out on valuable long-term savings. For future tax years, contributing more to your pension could also reduce your adjusted net income, potentially lowering or even eliminating the HICBC, while boosting your long-term retirement savings. Salary sacrifice arrangements can be especially effective here, as they allow you to exchange part of your salary for pension contributions, reducing taxable income. Although the rules around salary sacrifice are set to change in 2029, it remains a valuable tool.”
Mike Ambery outlines some of the key things to be aware of when it comes to self-assessment:
What is self-assessment and who needs to submit?
“Self-assessment is the system HM Revenue and Customs (HMRC) uses to collect Income Tax from people whose tax isn’t fully deducted through PAYE. While most employees have tax taken automatically from their wages, those who are self-employed or receive additional income may need to submit a tax return each year. It’s worth noting that these requirements are evolving as Making Tax Digital for Income Tax is introduced from April 2026. You’ll need to file a self-assessment for the last tax year (6 April 2024 to 5 April 2025) if any of the following apply:
- You were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
- You were a partner in a business partnership
- You earned £150,000 or more
- You had to pay Capital Gains Tax (CGT) when you sold an asset that had increased in value
- You had to pay the High Income Child Benefit Charge
- You earned over £10,000 or more from savings interest, investments or dividend
- You earned over £1000 from property or land
“This list isn’t exhaustive, so make sure to check if you are unsure. Before submitting, it’s worth checking your tax code is correct. If you need support, HMRC can provide guidance, or you can use a UK-accredited accountant, which doesn’t have to be expensive. You can also authorise a trusted friend or family member to complete and submit your return on your behalf.
I claim Child Benefit – do I need to do anything?
“Child Benefit is one of the most common areas where people are caught out by self-assessment, particularly as incomes rise. For the 2024/25 tax year, if you earnt over £60,000 in the 2024/25 tax year and you or your partner claim Child Benefit, you have to declare this on your self-assessment tax return, or you may face a penalty. This is called the High-Income Child Benefit Charge and it means you won’t be entitled to some or all of the Child Benefit. If your partner’s income was over £60,000 but yours was less, your partner needs to declare the Child Benefit on their tax return.
Why should I be thinking about my pension?
“For higher earners, self-assessment isn’t just about paying the right amount of tax - it can also be an opportunity to reclaim money. If you earnt over £50,271 a year in the last tax year, not completing a self-assessment tax return could lead to you missing out on valuable tax relief on pension contributions. Anyone with a pension receives 20% tax relief on every contribution they make, and this is added automatically. However, unless you’re using salary sacrifice to make pension contributions, higher rate taxpayers might need to claim the extra 20% of tax relief they are entitled to, which will then be repaid via a tax rebate, a change in tax code (which will mean you’ll pay less tax the following year) or a reduction in your tax bill for the current year. If you’re not sure whether you’re contributing via salary sacrifice, your employer will be able to help.
“Higher rate taxpayers should complete a self-assessment return every year they’ve paid higher rates, and anyone that hasn’t done this may have built up unpaid tax relief in arrears. It’s worth investigating if you think this applies to you, as you can make claims for up to four previous tax years, meaning you could be owed thousands of pounds from the government. HMRC doesn’t tend to prompt non-self-employed people to submit a self-assessment, so any higher rate taxpayers who pay their tax through PAYE need to actively request to submit a tax return. Self-assessment is also a great time to review your savings and consider whether adjusting your contributions could help you maximise tax efficiency.”
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