Changes to your income - how and when to report them to HMRC

What income changes you need to report to HM Revenue & Customs (HMRC) depends on your circumstances. This guide explains what you need to do and who you need to contact to let HMRC know about any changes to your income.

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If you pay tax through PAYE but don't normally complete a tax return

You should let HMRC know about changes to your income - even if you've received the income outside of your job or pension and it's not dealt with through Pay as You Earn (PAYE) by your employer or pension provider. For example, if you start receiving rental income.

HMRC may be able to change your tax code so that you pay the right amount of tax. If they do this you'll get a PAYE Coding Notice explaining the changes to your code and you may not need to complete a tax return.

However in some cases HMRC may ask you to complete a tax return and pay any extra tax through Self Assessment. HMRC will write and let you know if they need you to complete a tax return.

If your taxable income has gone down you may be due a refund.

Contact HMRC

Do you need to complete a tax return?

More about tax codes

Tax refunds and reclaiming overpaid tax

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If you don't normally complete a tax return and you're not on PAYE

If an increase in income takes your taxable income above your Personal Allowance and any Blind Person's Allowance you're entitled to you must contact HMRC.

You may need to complete a tax return and pay any tax you owe through Self Assessment.

Contact HMRC

Do you need to complete a tax return?

Find out about the Personal Allowance

Find out about Blind Person's Allowance

Should you be paying Income Tax

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If you already complete a tax return

If you have or expect a significant decrease in income you can let HMRC know right away. If you make 'payments on account' (advance payments of tax), HMRC may be able to reduce them to reflect your decrease in income. You don't have to report any increases in income immediately - you can report these on your tax return at the normal time.

Contact HMRC

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If you start or stop receiving state benefits and State Pension

If you start or stop getting state benefits, such as Jobseeker's Allowance, Carer's Allowance or Employment and Support Allowance, it may affect your tax bill. The sooner you get in touch with HMRC and tell them, the sooner they can adjust your tax code to make sure you always pay what's due.

Contact HMRC

State benefits that are taxable (Opens new window)

Pensions, state benefits and your tax code

Effect on tax credits

State benefits you get that are taxable are usually counted as income for tax credits purposes. These include contribution-based Employment and Support Allowance and contributions based Jobseeker's Allowance - but not the income-related or income-based types of these allowances.

If you're claiming tax credits, enter taxable benefits that you get on your claim form - follow the link below to find out which ones to include.

Which state benefits to report when making a tax credits claim

If you're already getting tax credits you need to let the Tax Credit Office know as quickly as possible if the following applies:

  • your income changes because you start - or stop - getting a taxable state benefit
  • you start - or - stop getting disability benefits, for example Disability Living Allowance

The Tax Credit Office can make sure you're getting the right amount of tax credits.

Changes in income and tax credits

Disability benefits - how do they affect tax credits payments?

Tax Credit Helpline

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If your company benefits change

If you start to get taxable company benefits - such as a company car, contributions to childcare costs or medical insurance - you should tell HMRC right away so that you don't get a large tax bill at the end of the year. And if you stop getting taxable benefits, you should let HMRC know quickly so you don't pay too much tax.

Employers don't have to tell HMRC about any company benefits you get until the end of the tax year, unless it's a new company car. If you let HMRC know sooner, your tax code can be adjusted more quickly, ensuring you pay the right amount of tax.

Contact HMRC

Effect on tax credits

Company benefits (benefits in kind) from your employer, such a company car and mileage allowance payments - are taken into account for your tax credits claim. You will need to report any changes to your 'benefits in kind' to the Tax Credits Office.

Contact details for tax credit enquires

Employer benefits - find out how to work them out for your tax credit claim

Read more about company benefits and your tax code

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If your income is more than £50,000 and you receive Child Benefit

You may be liable to a tax charge - called the High Income Child Benefit charge - if both of the following apply:

  • you or your partner have an individual income of more than £50,000 for a tax year
  • either you or your partner are entitled to Child Benefit, or get contributions from someone else who claims Child Benefit for a child who lives with you

A tax year runs from 6 April to 5 April the following year.

If you are liable to the tax charge and your income increases or drops, this can affect whether you continue to be liable or how much tax charge you have to pay.

For more information see Child Benefit High Income charge: changes in your income

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More useful links

Learn more about the ways you can pay Income Tax

How to work out income or working hours for your tax credits claim

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