Dividend vs Higher Rate Tax - what does the panel think?

[DirtyDog]

Read it again. It's taking about collecting tax through your tax code. If you earn more than the limits it outlines, they cannot collect the tax through your tax code and you will have to submit a SA if you owe any tax.

That's one way to read it.

I read it as two sections - one which says

You'll need to complete a tax return instead if the income you receive is:

• £10,000 or more from taxed savings and investments
• £2,500 or more from untaxed savings and investments
• £10,000 or more from property (before deducting allowable expenses)
• £2,500 or more from property (after deducting allowable expenses)

And one which then says

If you don't pay tax through a PAYE code you’ll need to complete a tax return if all of the following apply:

• you have income to declare, for example income from savings, trusts or abroad, rental income from land or property
• your total income exceeds your total allowances and reliefs
• you have tax to pay on this income

[TheCyclingProgrammer]

That's one way to read it.

I read it as two sections - one which says


And one which then says

The second part isn't what I'm basing my assertion on (although as I said above, it does reinforce it). You've missed out the opening paragraph of the first section completely, thus removing he context in which it applies.

The whole section that you are referring to is:

If you are an employee or a pensioner and already pay tax through a PAYE code, you can sometimes ask for tax that you owe on income, such as savings and property, to be collected through your code number. You'll need to complete a tax return instead if the income you receive is:
£10,000 or more from taxed savings and investments
£2,500 or more from untaxed savings and investments
£10,000 or more from property (before deducting allowable expenses)
£2,500 or more from property (after deducting allowable expenses)

We could dispute the badly written wording on that page all we like, it doesn't change what the legislation says and that's all that matters.

[northernladuk]

As ever TCP brings in an argument to introduce risk rather than take advice of all the accountants and just do it. Why fight the system when there is absolutely no need? Put it in and forget about it rather than try and take HMRC to task about their wording when then come knocking with a bag load of headaches for you. TCP's argument 'may' be correct but it doesn't mean it's the correct thing to do.

[TheCyclingProgrammer]

As ever TCP brings in an argument to introduce risk rather than take advice of all the accountants and just do it. Why fight the system when there is absolutely no need? Put it in and forget about it rather than try and take HMRC to task about their wording when then come knocking with a bag load of headaches for you. TCP's argument 'may' be correct but it doesn't mean it's the correct thing to do.

Come off it. What risk? If you don't owe any tax then the risk is zero. What exactly do you think HMRC can do? As pointed out, the only penalty for failing to notify is capped at the tax owed. Which makes sense because there is no legal requirement to notify HMRC if you do not owe any tax.

I don't understand why people want to create unnecessary paperwork for themselves. Getting yourself into the self assessment when there is no legal OR moral obligation to do so is nonsensical.

Do you think HMRC want the system filled with people filing nil returns each year?

Several accountants here might err on the side of caution but so what? There are accountants who do understand the legislation.

Director Self Assessment | AccountingWEB

[DirtyDog]

We could dispute the badly written wording on that page all we like, it doesn't change what the legislation says and that's all that matters.

As seems to be the trend, you have an opinion which seems at odds with the advice that many (if not all) accountants posting here have.

I'll follow the expert advice and guidance provided by the professional I pay, though.

[TheCyclingProgrammer]

As seems to be the trend, you have an opinion which seems at odds with the advice that many (if not all) accountants posting here have.

I'll follow the expert advice and guidance provided by the professional I pay, though.

You do that. I'll follow the law. My accountant agrees with me anyway.

Nobody had been able to refute what I've said and if somebody can show me he legislation that says you have to file a SA when you don't owe tax I'll be happy to retract.

[DirtyDog]

Come off it. What risk? If you don't owe any tax then the risk is zero. What exactly do you think HMRC can do? As pointed out, the only penalty for failing to notify is capped at the tax owed. Which makes sense because there is no legal requirement to notify HMRC if you do not owe any tax.

I don't understand why people want to create unnecessary paperwork for themselves. Getting yourself into the self assessment when there is no legal OR moral obligation to do so is nonsensical.

It takes five minutes to complete if it's straightforward. If you should have done one and didn't, HMRC can ask for the tax owed, plus the time and effort you now need to put in in resolving their inquiry.

I don't understand why people want to delay the inevitable, which is going to be more hassle later on, just to try to prove a point based on their interpretation of the law, which is at odds with the guidance provided by HMRC.

Screw it, let's ignore what the law says and let HMRC dictate how we do things. Let's all stop pretending we aren't disguised permies and operate within IR35. After all, that's what HMRC would like isn't it?

Yes, they are comparable situations really

[DirtyDog]

You do that. I'll follow the law. My accountant agrees with me anyway.

Nobody had been able to refute what I've said and if somebody can show me he legislation that says you have to file a SA when you don't owe tax I'll be happy to retract.

Your accountant's advice differs from mine in so many different ways, I'd love to know who it is, just to know who to avoid.

[DirtyDog]

You do that. I'll follow my interpretation of the law. My accountant agrees with me anyway.

FTFY

[TheCyclingProgrammer]

It takes five minutes to complete if it's straightforward. If you should have done one and didn't, HMRC can ask for the tax owed, plus the time and effort you now need to put in in resolving their inquiry.

I don't understand why people want to delay the inevitable, which is going to be more hassle later on, just to try to prove a point based on their interpretation of the law, which is at odds with the guidance provided by HMRC.

For the record, I do send a SA each year and have done for over 10 years. My last 5 have all been nil returns but I've had to do them because I've been asked for one each year. Because I'm a company director, I expect HMRC to continue requesting them.

And that's fine, you're right it doesn't take long at all.

But thats besides the point. The point was that OP's wife hasn't needed to register for SA because she hasn't owed any additional tax and NLUK was wrongly implying that he was wrong and was going to be in the tulip. Which is, frankly, bollocks.