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  1. #1

    Nervous Newbie


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    Default LRT PAYE employee but also receive dividends from husband. Need to do a tax return?

    Hi, I'm a teacher so pay tax through PAYE each month. Minimal bank interest has tax deducted each month. I have no other income besides dividends from husband's company which still keeps me below the threshold as a lower rate tax payer.

    My accountant said I need to fill in a tax return for this. However, on HMRC it seems to say that I would only have to if the dividends made me a higher rate tax payer?

    I will phone HMRC on Monday. Does anyone have any advice please?

    Thanks in advance!

  2. #2

    Contractor Among Contractors


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    Are you also a director of the company?

    My understanding is that if no tax is due then while HMRC might say that all directors must do a SA return, it's not a legal requirement unless they actually send you a notice to file a return. If you're not on the company's PAYE then it's probably off HMRC's radar. IANAA.

  3. #3

    Super poster


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    As above, HMRC like directors to submit one but if you aren't chargeable to tax you aren't obliged to notify them so you only need to do a SA legally if HMRC send you a notice asking for one.

    The guidance on the HMRC website is quite misleading and contradictory so I wouldn't worry too much about that.

    Even if HMRC were to turn around in the future and say you should have done one they'd be hard pressed to apply a penalty when you owe no tax (and haven't been asked to submit a return anyway).

    Having said all that, some people prefer to err on the side of caution and avoid arguments with HMRC later down the line so despite there being no legal requirement, for the 10-15 minutes it takes you could register voluntarily. A few years of nil returns and HMRC may well ask you to stop sending them.

    Also, if you and your spouse ever decide to withdraw a large sum from the company in one go for some reason, taking you into the higher rate, you'll need to file one anyway.
    Last edited by TheCyclingProgrammer; 29th March 2014 at 08:59.

  4. #4

    Contractor Among Contractors


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    If you are sure there is no liability over basic rate, then there is no need to worry about a tax return unless you are specifically sent a notice to complete one by HMRC.

    Mere receipt of dividends from family company isn't a trigger.

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