Three types of letter are being sent depending on whether the person: 

• has a dormant self assessment (SA) account (letter one);
• has received a notice to submit a tax return for 2021/22 but has not done so (letter two); or
• is not in SA but their level of income suggests they should be (letter three).  

Action required 

The person should check if they need to submit a tax return for 2021/22 (see below). If they do, they should send the return to HMRC by 29 September 2024. They should also register for SA by this date if they have not already done so.  

The tax return should have been submitted, and the tax paid, by 31 January 2023. HMRC will charge interest on any tax paid late and may charge penalties. HMRC has provided an online tool that can be used to estimate penalties for late payment and late filing of the tax return. If the taxpayer has not notified HMRC of an income source by registering for SA, late notification penalties may also be relevant.  

If the person thinks that a tax return is not required, they should contact HMRC using the details included in the letter by 29 September 2024. The consequences of not doing this are set out in the letter.  

If HMRC does not receive a response, it may reactivate the person’s SA account (for those receiving letter one), or may issue an SA return (those receiving letter three). 

The letter is not a formal compliance check into the person’s tax affairs. It is noted that HMRC may carry out a compliance check in the future in which case a penalty may be charged if errors are found. The amount of the penalty could be reduced if the person tells HMRC about any mistakes before the check is carried out.  

HMRC’s self assessment criteria 

The letter states that the person may need to complete a tax return for 2021/22 if any of the following applied for that year: 

• they earned more than £100,000 (even if pay as you earn (PAYE) was applied);
• they received income from property above the rent-a-room limit of £7,500, or £3,750 if the property was owned jointly;
• they received income from self-employment and exceeded the £1,000 trading allowance; 
• they disposed of shares, property, or other assets;
• they had dividends or savings interest (but not including ISAs). HMRC’s guidance on how interest is taxed states that a person should complete a tax return if their investment income exceeds £10,000;
• they claimed tax relief on gift aid donations or pension contributions;
• the high income child benefit charge (HICBC) applied to recover part or all of the child benefit received. For 2021/22, the HICBC applied to the higher earner in the household where that person’s income exceeded £50,000; and
• they made student loan repayments other than repayments dealt with via PAYE. 

The income threshold for SA was increased from £100,000 to £150,000 for 2023/24, and it was removed altogether for 2024/25 onwards.  

For further information, see HMRC’s guidance Who must send a tax return? This sets out the SA criteria for 2023/24 and includes a link to an online tool.