How does the 2024/25 tax year affect UK Self Assessment for individuals with multiple income sources?

Understanding what changed in the 2024/25 tax year and why it matters

The UK Self Assessment system is designed to collect tax where Pay As You Earn (PAYE) does not fully capture someone’s overall position, or where HM Revenue & Customs (HMRC) needs a fuller picture of an individual’s income and reliefs. If you have more than one income source, the 2024/25 tax year can affect your Self Assessment in two big ways: first, through the headline numbers (allowances, thresholds, rates, and benefit-related rules) that determine how much tax you owe; and second, through the way multiple income streams interact with each other when those numbers are applied in a single calculation.

Many people assume that if each income source is taxed “correctly” in isolation—say, your employment income is taxed via PAYE, your pension is taxed at source, and your savings interest has tax deducted or is reported by your bank—then everything will come out in the wash. In reality, when you have multiple income sources, the order in which income is taxed, the bands it falls into, and the way allowances are allocated can shift your effective tax rate. You may also end up underpaying or overpaying through PAYE during the year, especially if your tax code did not fully reflect your circumstances. Self Assessment is where the whole picture is reconciled.

For the 2024/25 tax year (6 April 2024 to 5 April 2025), the overall structure of UK income tax remains familiar: you have a Personal Allowance (subject to tapering at higher incomes), an income tax system with bands (basic, higher, additional), and a set of special allowances and rates for certain types of income such as savings and dividends. What changes for individuals with multiple income sources is often not a single “new rule” but the accumulation of interactions: multiple PAYE employments, pensions alongside work, rising interest, side-hustle self-employment, rental income, dividends from small companies, and capital gains events all interacting in one return.

Who needs Self Assessment when income comes from different places?

Self Assessment is not required for everyone, and in some cases HMRC will collect tax through PAYE via adjustments to your tax code. But individuals with multiple income sources frequently cross the line where Self Assessment becomes necessary or at least advisable. Typical scenarios include:

Employment plus self-employment: You work in a job taxed under PAYE and also run a sole trade (freelancing, consultancy, online sales, gig work). Even if the self-employment income is relatively modest, you may need to declare it and pay income tax and National Insurance contributions through Self Assessment.

Multiple employments: Two jobs, or a job plus taxable benefits in kind, can result in the Personal Allowance being allocated incorrectly between employments, causing underpayment during the year.

Pensions plus other income: A private pension, a state pension, and part-time employment can lead to tax under- or over-deductions depending on how tax codes are set.

Property income: UK rental income and certain overseas property income generally needs reporting if it exceeds relevant limits or if HMRC requires it.

Savings and dividends: Higher interest rates have meant more people exceed savings allowances. If you also have dividends (for example from investments or a family company), your total tax position can change substantially and may need reconciliation.

Capital gains: Disposals of shares, cryptoassets, second properties, or other chargeable assets can trigger reporting obligations, and some gains can affect other parts of your return.

In the real world, many people end up in Self Assessment not because one income source is large, but because the mix makes PAYE an imperfect fit. The 2024/25 tax year affects this reconciliation, and understanding the mechanics helps you avoid unpleasant surprises.

The 2024/25 income tax framework in plain language

Self Assessment ultimately calculates your total income tax for the year by stacking your income in a specific order, applying allowances, and taxing what remains at the relevant rates. While Scotland has different income tax bands for non-savings, non-dividend income, the overall concept of “stacking” remains essential across the UK.

Your income is generally grouped into categories:

Non-savings income: Wages, pensions, self-employment profits, rental profits (usually), and most taxable benefits.

Savings income: Bank and building society interest, certain bond interest, and similar.

Dividend income: Dividends from UK and many overseas companies.

These categories matter because allowances and rates differ. For example, savings can benefit from the starting rate for savings (in certain circumstances) and the Personal Savings Allowance, while dividends have their own dividend allowance and rates. With multiple income sources, these categories often overlap, which can move income into higher bands or remove access to allowances.

How multiple income sources are “stacked” in a tax calculation

One of the most important Self Assessment concepts for people with multiple incomes is that HMRC does not tax each income stream independently. Instead, the calculation stacks income in a hierarchy, typically putting non-savings income first, then savings income, then dividends. This matters because tax bands are filled as you go.

Here’s a simplified example. Imagine you have:

1) Employment income taxed under PAYE
2) A private pension payment
3) Savings interest
4) Dividends

When your Self Assessment is calculated, your employment and pension income will usually fill up the Personal Allowance and basic rate band first. Your savings interest is then taxed next, potentially partly at 0% if you have savings allowances left, and potentially at higher rates if your non-savings income already used up the lower bands. Dividends come last and are taxed at dividend rates, but only after being pushed into whatever bands remain. The presence of one income source changes the rate applied to another.

This stacking effect becomes more pronounced in 2024/25 for people experiencing any of the following: a pay rise, a second job, increased interest income from higher rates, additional pension withdrawals, or new dividend flows. Even if each item seems “small,” their combined effect can tip you into a higher band, reduce allowances, or increase the effective marginal rate on the top portion of income.

Personal Allowance and the high-income taper: why it bites harder with mixed income

The Personal Allowance is the amount of income you can receive tax-free before income tax applies. For individuals with multiple income sources, the main issue is not simply the existence of the allowance but how quickly it can be eroded when your income increases.

At higher income levels, the Personal Allowance is reduced once your “adjusted net income” exceeds a threshold. Adjusted net income is not simply your salary; it can include many other forms of income and it is affected by certain reliefs, such as pension contributions and charitable gifts. If you have multiple income sources—say salary plus rental profit plus interest—you may cross the threshold without realising, especially if the additional income is not fully taxed through PAYE.

When the Personal Allowance is tapered, the effective marginal tax rate in the taper range becomes significantly higher. That is because each extra pound of income not only gets taxed, but can also remove part of your tax-free allowance, making more of your income taxable. If you have several income streams arriving at different times (for example, a bonus, an end-of-year dividend, and rental profit), you might not see the full effect until you complete your Self Assessment calculation. For planning, this means you should consider your total adjusted net income for 2024/25, not just your main job income.

PAYE with multiple jobs and pensions: common 2024/25 pitfalls

PAYE works best when you have one main employment and limited additional taxable income. When you have two employments, or an employment plus one or more pensions, PAYE can still operate correctly, but it relies on accurate tax codes and up-to-date information. In practice, the allocation of the Personal Allowance across jobs and pensions can go wrong, leading to underpayment that shows up later in Self Assessment.

Common pitfalls include:

Incorrect allocation of Personal Allowance: If two employers both operate a tax code that includes some allowance, you may receive more tax-free pay than you are entitled to overall, leading to a tax bill later.

Emergency tax codes: Starting a new job or pension partway through 2024/25 can trigger an emergency tax code until HMRC updates records, which can cause temporary overtaxing or undertaxing.

Benefits in kind: If you receive taxable benefits (company car, medical insurance), HMRC usually collects tax through your code. With multiple income streams, coding adjustments can become more complex and less accurate.

State pension interactions: The state pension is paid gross (without tax deducted). If you also have PAYE income, HMRC often collects the tax due on the state pension by reducing your tax code for employment or private pension. If your other income changes, the coding may not keep up.

For 2024/25 Self Assessment, the key is to gather accurate P60s, P45s, pension statements, and any notices of coding. Your return reconciles what should have been taxed with what was actually deducted. If you have underpaid due to coding issues, you may owe tax; if you overpaid, you may receive a repayment.

Savings interest in 2024/25: why more people need to pay attention

For individuals with multiple income sources, savings interest is often the hidden driver of unexpected tax bills. Higher interest rates have increased the amount of interest many people earn, and that interest can push you over thresholds or consume allowances you didn’t realise you were using.

The tax treatment of savings interest depends heavily on your other income because of the way savings allowances work:

Personal Savings Allowance (PSA): The PSA can allow a certain amount of interest to be taxed at 0%, but the size of your PSA depends on whether you are a basic rate, higher rate, or additional rate taxpayer. If your non-savings income already places you in a higher band, your PSA may be smaller or unavailable. A person with a job and a small pension might be a basic rate taxpayer, but add rental profit and interest and they may become a higher rate taxpayer, shrinking the PSA and increasing the tax on their interest.

Starting rate for savings: In some circumstances, if your non-savings income is low, you may get a 0% starting rate band for savings. However, this is quickly lost as non-savings income rises. People with multiple income sources often have enough non-savings income that they do not benefit, but it can be relevant if you have low earnings and meaningful interest.

In 2024/25, you should not assume “the bank sorted the tax.” Many savings accounts pay interest gross, and HMRC may not collect the correct tax during the year unless your code is adjusted. Self Assessment is where the final tax due on your interest is calculated based on your total income position.

Dividends alongside salary, rent, and self-employment: how the mix changes your rate

Dividend income is common for investors and especially for owner-managers of small companies. The important point for 2024/25 Self Assessment is that dividends are taxed after your other income, and their rate depends on which tax band they fall into once everything is stacked.

If you have a salary that uses up most of the basic rate band, even a modest dividend can be taxed at higher dividend rates because it lands in the higher rate band. Likewise, rental profits or self-employment profits can push dividends into higher bands. This can lead to a situation where you believe your dividends are “small” but they are taxed at a higher rate than you expected.

Dividends also interact with adjusted net income and, therefore, can contribute to the tapering of the Personal Allowance. That matters if you are near the taper threshold: the dividend might be taxed at a higher dividend rate and also reduce your Personal Allowance, compounding the impact.

For 2024/25 planning and reporting, make sure you identify dividend vouchers, dates paid, and amounts. If you receive dividends from multiple companies or funds, collate the totals early rather than trying to reconstruct them at the last moment.

Self-employment profits in 2024/25: why “side income” can have outsized effects

Self-employment is one of the most common additional income sources that brings people into Self Assessment. The tax impact is not just income tax on the profits; it can also include National Insurance, changes to tax bands, and knock-on effects to allowances and benefits.

If you have employment income and self-employment profits, your self-employment profits are stacked on top of your salary for income tax purposes. This means the top slice of your profits can be taxed at higher rates than you might assume if you only looked at the profits alone. Also, self-employment profits can affect your entitlement to the Marriage Allowance, the High Income Child Benefit Charge (if relevant), and other means-tested considerations.

Additionally, self-employment often comes with deductible expenses, capital allowances, and decisions about accounting methods. For 2024/25, accurate record-keeping is especially important because the higher your “other income,” the more valuable legitimate deductions can be in keeping you out of higher tax bands or in preserving allowances.

If you have multiple income sources, it is worth thinking about your self-employment not as an isolated venture but as a component that changes the rate on your other income and vice versa. That framing helps explain why a relatively small side profit can result in a surprisingly large additional tax bill after the full reconciliation.

Rental income and the importance of profit, not just rent received

Property income is another frequent companion to employment or pension income. What matters for Self Assessment is your taxable rental profit, which is generally rents received minus allowable costs, subject to specific rules. The 2024/25 tax year affects rental income reporting in the sense that your total income position in the year determines the rate at which rental profits are taxed, and it influences the impact of any restrictions or reliefs.

For individuals with multiple income sources, the practical issues include:

Timing and completeness: Rental income may be steady, but expenses can be lumpy (repairs, insurance, agent fees). If you forget legitimate expenses, your taxable profit increases and may push you into a higher band.

Joint ownership: If you own property jointly, the split of income matters. The tax impact may depend on each person’s other income sources in 2024/25.

Overseas property income: If you have overseas rentals as well as UK income, reporting and relief for foreign tax paid can become a key part of your return.

As with other income streams, rental profit doesn’t just add tax; it changes the band your savings interest and dividends fall into, and it can affect adjusted net income calculations.

High Income Child Benefit Charge: multiple income sources can trigger it unexpectedly

If you or your partner receive Child Benefit, your 2024/25 Self Assessment may need to address the High Income Child Benefit Charge (HICBC) if your income exceeds the relevant thresholds. What catches people out is that “income” for these purposes is not limited to salary. Dividends, rental profits, self-employment profits, and some investment income can contribute.

Where multiple income sources exist, it’s common for someone to look at their payslips and conclude they are below a threshold, only to find that additional income pushes them over when the year is totalled. In a Self Assessment context, you may need to pay back some or all of the Child Benefit received via the charge, and you may need to file a return specifically because the charge applies.

Even if you do not need to file for other reasons, HICBC can create an obligation. The 2024/25 year is particularly relevant to households where interest income has risen or where a one-off bonus coincided with other income streams.

Student loan repayments: why the Self Assessment figure may differ from PAYE

If you have a student loan and multiple income sources, repayments can be calculated through PAYE for employment income, but additional income sources may trigger extra repayments through Self Assessment. This can happen when self-employment profits or other taxable income increases your total income above the repayment threshold. People with multiple income streams often discover that their PAYE deductions covered only part of what is due, with the remainder calculated on the Self Assessment return.

In 2024/25, this interaction remains an important reason to model your overall income rather than relying on PAYE deductions as the final answer. If you have both PAYE and self-employment, you should expect Self Assessment to adjust student loan repayments based on total income.

Capital gains alongside income: not “income tax,” but still a Self Assessment driver

Capital gains tax (CGT) is separate from income tax, but it is frequently reported through Self Assessment and can be triggered by a variety of events: selling shares, disposing of cryptoassets, selling a second property, gifting assets, or certain changes in ownership. For individuals with multiple income sources, capital gains matter because the rate of CGT you pay on some assets depends on your income tax band. Your 2024/25 income therefore can influence whether your gains are taxed at lower or higher CGT rates.

Additionally, even if your main income is taxed via PAYE, a significant capital gain in 2024/25 can bring you into Self Assessment. If you have multiple income sources already, you are more likely to be within Self Assessment anyway, but gains can increase complexity substantially. Good record-keeping (purchase costs, fees, enhancement expenditure, and dates) becomes essential.

Payments on account: the 2024/25 year can affect your cash flow after filing

One of the most misunderstood parts of Self Assessment for people with multiple income sources is how the tax payment schedule works, especially “payments on account.” If your Self Assessment bill exceeds certain conditions, HMRC may require you to make advance payments towards the next tax year’s bill. This often affects people who have significant tax due that was not collected at source—commonly self-employment profits, rental profits, and dividends.

In practical terms, if 2024/25 is the first year where your untaxed income becomes substantial, you might not only pay the tax due for 2024/25 when you file, but also be asked to pay a first payment on account towards 2025/26 at the same time, and a second payment later. This can feel like being taxed twice, but it is actually a timing mechanism.

Multiple income sources make this more likely because untaxed streams accumulate. For example, an employee who starts a side business in 2024/25 might expect a single bill, but could instead face a larger combined payment that includes an advance toward the next year. If you anticipate this, you can plan cash flow and avoid surprises.

How to keep your 2024/25 records organised when income is diversified

The biggest practical challenge with multiple income sources is not the tax calculation itself; it’s gathering accurate, complete information. For 2024/25 Self Assessment, aim to keep the following categories tidy:

Employment income: P60, P45, payslips for taxable benefits, and details of expenses reimbursed or allowances paid.

Pension income: P60 for pensions, statements for withdrawals, and any tax deducted.

Self-employment: Income records, invoices, platform statements, mileage logs, receipts, bank statements, and clear separation of personal and business spending.

Property: Rent statements, agent statements, mortgage interest statements (where relevant), insurance, repairs, safety certificates, and service charges.

Savings: Annual interest statements or consolidated totals from your banks and building societies; don’t rely on memory.

Dividends: Dividend vouchers, broker statements, and fund distribution statements.

Capital gains: Contract notes, exchange records (including crypto), acquisition and disposal dates, and costs.

Organisation helps you do more than file accurately. It allows you to see your total position early, which is critical for people with multiple incomes because the interactions often create tax outcomes that are not intuitive. Knowing your approximate total income for 2024/25 can help you decide whether to increase pension contributions, make charitable donations, or set aside cash for the tax bill and potential payments on account.

Using pension contributions and Gift Aid to manage adjusted net income

When you have multiple income sources, you may find yourself near thresholds that trigger disproportionate tax effects, such as the tapering of the Personal Allowance or the Child Benefit charge. Two of the most common tools for managing adjusted net income are pension contributions and Gift Aid donations.

Pension contributions: Depending on how you contribute, pension payments can reduce your adjusted net income, which may help preserve the Personal Allowance or reduce exposure to benefit-related charges. For someone with mixed income (salary, dividends, property, self-employment), this can be especially valuable because it addresses the combined total rather than any single stream.

Gift Aid: Gift Aid donations can also affect adjusted net income calculations and can extend the basic rate band for certain tax purposes. For individuals with dividends and interest taxed at higher rates due to band stacking, the effect can be meaningful.

The important point for 2024/25 Self Assessment is that these reliefs must be recorded correctly and, where relevant, supported by evidence. If you are using them as part of your planning, keep clear records of the amounts paid and the dates.

When HMRC already has information: why you still need to report correctly

A common misconception is that because HMRC receives information from employers, pension providers, banks, and investment platforms, you do not need to worry about reporting. In practice, while HMRC may have data, the Self Assessment return is your declaration and reconciliation. You must ensure the figures you submit are complete and correct.

For example, HMRC may have bank interest data, but it might not capture the full picture if accounts are in different names, if interest is earned overseas, or if reporting timing differs. Employers report pay and tax deducted, but if you had multiple jobs, the allocation of allowances may still be wrong. Investment platforms report dividends, but you may also have distributions from funds, overseas income, or corporate actions affecting capital gains calculations.

In 2024/25, with multiple income sources, it is particularly important to compare your own records to what was taxed at source and ensure your return reflects the correct totals. Self Assessment is not merely “telling HMRC what they already know.” It is reconciling how the rules apply to your combined situation.

A worked-style illustration: how extra income changes the rate on everything else

Consider an individual in 2024/25 with a salary taxed under PAYE. On top of that, they have a small freelance profit, some interest from savings, and a handful of dividends from investments. Each item alone might seem manageable, but together they can shift the tax profile.

Employment income may already fill most of the basic rate band. The freelance profit then pushes some income into the higher rate band. Once in the higher rate band, the Personal Savings Allowance can reduce (depending on your circumstances), and savings interest that might have been partly tax-free becomes taxable at a higher rate. Dividends, arriving last in the stack, are then taxed at higher dividend rates. The result is that the “tax on the side income” is not simply the tax on that side income; it includes knock-on changes to allowances and band placement.

The key lesson is that the 2024/25 tax year affects Self Assessment for multi-income individuals through combined totals and interactions. If you only look at each stream separately, you miss the way they compound.

Common 2024/25 Self Assessment mistakes for people with multiple income sources

When income is diversified, errors tend to cluster around omissions, timing, and misunderstandings about what is taxable. Common mistakes include:

Forgetting small income streams: A small amount of interest, a one-off freelance job, or a minor dividend can still matter if it pushes you over a threshold.

Mixing gross and net figures: Some income is received net of tax, some gross. Self Assessment generally wants gross figures and the tax already deducted where relevant. Confusing these can misstate your liability.

Not accounting for tax deducted at source: Pension withdrawals may have tax deducted under PAYE. If you report the income but miss the tax deducted, you can overstate what you owe.

Claiming expenses incorrectly: For self-employment or property, either missing allowable expenses or claiming non-allowable personal costs can cause problems.

Not planning for payments on account: The cash flow shock of payments on account often follows the first “big” Self Assessment bill driven by multiple income sources.

Assuming PAYE was final: With multiple jobs, pensions, and untaxed income, PAYE is rarely the full story.

Practical steps to make your 2024/25 filing smoother

If you have multiple income sources in 2024/25, the best approach is structured and proactive rather than reactive. These steps help:

1) Create a single income summary: List each income source, the gross amount, and any tax deducted. Include employment, pensions, self-employment profit, rental profit, interest, dividends, and gains events.

2) Estimate your band position early: