Income Tax Return for Spouse

**Craig@Clarity** · 4 November 2011, 08:55

If she's not a director, HMRC haven't written to her to complete a tax return and she has not received any income where tax is due on it then technically she doesn't need to file one. If her dividends take her over the higher rate tax threshold then she'll need to complete one.

Make sure when you're assessing your wife's income to add up all her gross income including bank interest received, gross salary and gross dividends. Some people get confused between net dividends and gross dividends. It's the gross dividend figure which counts for tax return purposes.

**tractor** · 4 November 2011, 09:55

What the nasty tax man says about it...

This should help you decide whether she needs to get on the annual treadmill or not

**psychocandy** · 4 November 2011, 10:45

Originally posted by Moonshine View Post

Hi Guys,

Have this query around filing income tax returns for my spouse.
I am contractor and director within my own limited company with 90% stake. My wife is a 10% stakeholder.
I pay her out a salary of around 10K from the company and nominal dividends@10% through the year.
My query is should my wife file her income tax returns just like i do as a director. There are no other earnings for my wife :-(

I checked with my accountant and they recommend that my wife must contact the local tax office and let them know about the dividends she gets and they will be able to advise if she has to file tax returns or not.

I just wanted check what you guys do and the best possible option for this?

Thanks,
MS

No-one's asked you surprisingly what your wife does for the 10K a year salary? Be careful here if the answer is 'looks after the admin or does the book-keeping'...

**Nixon Williams** · 4 November 2011, 11:11

Originally posted by Moonshine View Post

Hi Guys,

Have this query around filing income tax returns for my spouse.
I am contractor and director within my own limited company with 90% stake. My wife is a 10% stakeholder.
I pay her out a salary of around 10K from the company and nominal dividends@10% through the year.
My query is should my wife file her income tax returns just like i do as a director. There are no other earnings for my wife :-(

I checked with my accountant and they recommend that my wife must contact the local tax office and let them know about the dividends she gets and they will be able to advise if she has to file tax returns or not.

I just wanted check what you guys do and the best possible option for this?

Thanks,
MS

You have not stated how much the dividends to your wife are, but if her total dividend income exceeds £10,000 per annum, then she will have to complete a tax return.

The date to advise HMRC of her requirement to complete a return is 5th October after the end of the tax year, so if she is liable for a return for 2010/11, get in touch with HMRC quickly.

Alan

**MickeyP** · 4 November 2011, 15:55

Originally posted by Nixon Williams View Post

You have not stated how much the dividends to your wife are, but if her total dividend income exceeds £10,000 per annum, then she will have to complete a tax return.

The date to advise HMRC of her requirement to complete a return is 5th October after the end of the tax year, so if she is liable for a return for 2010/11, get in touch with HMRC quickly.

Alan

I thought you only needed to complete a return if her dividends take her over the higher rate tax threshold?

Or is this another grey area?

**Nixon Williams** · 4 November 2011, 16:04

Originally posted by MickeyP View Post

I thought you only needed to complete a return if her dividends take her over the higher rate tax threshold?

Or is this another grey area?

No, HMRC state that if the dividend income exceeds £10,000, then the tax payer must advise HMRC by 5th October after the end of the tax year.

You are probably getting at the point that if her only income is £10,000 in salary and £10,000 in dividends, then she will not have any extra tax to pay, assuming her salary has been correctly taxed.

Alan

**MickeyP** · 4 November 2011, 16:16

Where do they state this Alan? Is it from the link posted earlier in this thread? ie:

"Income above a certain level from savings, investment or property
If you don't already complete a tax return, you'll need to do so if you receive any of the following:

•£10,000 or more income from savings and investments"

If so then surely this includes a huge amount of permie employees who I'm certain don't file a tax return.

**Craig@Clarity** · 4 November 2011, 16:20

There was some debate about this previously which can be found here http://forums.contractoruk.com/accou...onsible-2.html

**Nixon Williams** · 4 November 2011, 17:33

Originally posted by MickeyP View Post

Where do they state this Alan? Is it from the link posted earlier in this thread? ie:

"Income above a certain level from savings, investment or property
If you don't already complete a tax return, you'll need to do so if you receive any of the following:

•£10,000 or more income from savings and investments"

If so then surely this includes a huge amount of permie employees who I'm certain don't file a tax return.

Yes, the link provided earlier covers this subject. I would agree that there are alot of people who do not correctly declare their income to HMRC.

Part of the problem is that many accountants do not get their clients into the habit of following the correct procedure on declaring dividends and recording them etc. It is not sufficient to simply write 'dividend' on a bank statement nor just to enter an amount in a dividend column of a spreadsheet.

Therefore many people do not have easy accessible records of what dividends have been taken let alone declared.

Alan

Income Tax Return for Spouse