HMRC guidance: tax return for people with more than £10,000 in dividends

**AtW** · 11 May 2013, 22:54

Originally posted by mickael28 View Post

I cannot really see any advantage for them to make such a request, just more inconvenience for us in order to put all the paperwork together... why could they prefer this?

HMRC most certainly want to know how many people get little taxable salary but plenty of dividends, yet stay under high tax rate threshold.

**Wanderer** · 12 May 2013, 09:12

Originally posted by mickael28 View Post

My wife's income and dividends mean that she won't need to pay further tax anyway, so I was wondering if it'd be wise to file the tax return as suggested by HMRC or no need for it?

It's an interesting one. I don't know if it's true but I've heard that HMRC would "like" your wife to file one but there's no legal requirement. Maybe one of the accountants here can comment on this. Is it worth doing one to keep HMRC happy or just not bother and avoid the paperwork?

**malvolio** · 12 May 2013, 09:37

ISTR that you are required to complete an SAR if you are receiving income that is not taxed at source and htat may take you over the UEL bioundary. Dividend income may well come under that heading.

**Old Greg** · 12 May 2013, 13:04

There was a thread a few months ago.

From memory the accountants seemed to unanimously agree that a self assessment should be completed. But it didn't sound as if there was any legal obligation.

The question I would ask is: what happens if a return is not completed.

**Jessica@WhiteFieldTax** · 12 May 2013, 13:53

Simplifying considerably, HMRC can only penalise you if:

~ a - they issue antics to compete a return and you don't; or

~ b - you don't declare a source of income which is either untaxed or takes you into a different tax band

All of which means unless you are either asked for a return or owe tax, don't worry.

Good practice is for the accountant to consider both director and spouses income from all sources and do a check.

The issue of whether a return is due if you have dividend income of £x returns is a red herring; as, due to above, they are toothless.

**mickael28** · 12 May 2013, 14:03

Originally posted by Jessica@WhiteFieldTax View Post

Simplifying considerably, HMRC can only penalise you if:

~ a - they issue antics to compete a return and you don't; or

~ b - you don't declare a source of income which is either untaxed or takes you into a different tax band

All of which means unless you are either asked for a return or owe tax, don't worry.

Good practice is for the accountant to consider both director and spouses income from all sources and do a check.

The issue of whether a return is due if you have dividend income of £x returns is a red herring; as, due to above, they are toothless.

Thanks Jessica.

Could my accountants be asking and suggesting that we do it because the £10K dividends took my spouse into a different tax band (from below personal allowance to basic rate 20%)?

(On a side note, what does the expression 'they are toothless' mean?

)

**Jessica@WhiteFieldTax** · 12 May 2013, 20:59

I don't think a change of tax band is the trigger; you've said yourself itching further is due?

Your accountants guidance isn't worded that clearly, as it seems to confuse compulsion and suggestion; in light of what you've gleaned here go ack to them and seek clarification?

**mudskipper** · 13 May 2013, 03:32

Originally posted by mickael28 View Post

(On a side note, what does the expression 'they are toothless' mean?

)

A dog without teeth can bark as much as it likes, but it can't bite

HMRC guidance: tax return for people with more than £10,000 in dividends