Income reporting threshold increased

The £3,000 reporting threshold for trading, property, and other income will simplify tax returns—300,000 people could be freed from filing. A digital alternative is also coming.

As part of the Spring 2025 Tax Update: Simplification, Administration and Reform, the government confirmed changes to the Income Tax Self Assessment (ITSA) reporting thresholds for trading, property, and other taxable income. From a future date within this Parliament, these thresholds will all be aligned and increased to £3,000 (gross) each.

This reform is designed to streamline the tax system and reduce unnecessary reporting. As a result, up to 300,000 taxpayers will no longer be required to submit a self-assessment return if their taxable income falls below the new threshold. Of those affected, an estimated 90,000 individuals will have no tax to pay at all and will not need to report their trading income to HMRC in the future.

For those with income below the threshold who do have tax to pay, a new digital reporting service will be introduced, offering a simpler alternative to self-assessment Taxpayers will also retain the option to remain in self-assessment if they prefer.

The government has said that they will release further details in a transformation roadmap set to be published later this year.