Answers · UK 2025/26
I am employed and pay tax through PAYE - why has HMRC told me to file Self Assessment?
Being on PAYE does not always exempt you. HMRC commonly requires a return if you earn over GBP 150,000, owe the High Income Child Benefit Charge (income GBP 60,000 to GBP 80,000), have untaxed income over GBP 2,500, dividends over GBP 10,000, or capital gains above the GBP 3,000 exemption. Once HMRC issues a notice, you must file even if you owe nothing.
Full answer
PAYE collects tax on your salary, but Self Assessment captures income PAYE cannot see. HMRC will typically issue a notice to file if any of these apply: total income over GBP 150,000; the High Income Child Benefit Charge because you or your partner earn between GBP 60,000 and GBP 80,000; untaxed income such as rent, tips or freelance earnings over GBP 2,500; dividend income over GBP 10,000; savings interest above your Personal Savings Allowance not collected via your code; or capital gains exceeding the GBP 3,000 Annual Exempt Amount. Worked example: Daniel earns GBP 62,000 in employment and his partner claims Child Benefit for two children. Because his income is between GBP 60,000 and GBP 80,000, he owes the HICBC. The charge is 1% of the benefit for every GBP 200 over GBP 60,000, so at GBP 62,000 he repays 10% of it. HMRC sends him a notice to file. Even though his salary is fully taxed under PAYE, he must complete a return to declare and pay the HICBC by 31 January. Important: once HMRC issues a notice to file, you are legally required to submit a return by the deadline or face the GBP 100 penalty, even if it turns out no extra tax is due. If you think you genuinely do not need to file, ask HMRC to withdraw the notice. Use the child benefit HICBC calculator to work out the charge, or the income tax calculator for the wider picture. Check whether you need to file at gov.uk/check-if-you-need-tax-return.
Try the calculator
This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.