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

[mudskipper]

(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

[Jessica@WhiteFieldTax]

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?

[mickael28]

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]

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.

[Old Greg]

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.

[malvolio]

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.

[Wanderer]

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?

[AtW]

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.

[mickael28]

Hello,

I got this information from my accountant:

Due to an update in HMRC Guidance, they are now requesting any person in receipt of more than £10,000 in
investment income (dividends), to complete a personal tax return. If you have a spouse or partner who
receives more than £10,000 from your company, you may wish for them to complete a personal tax return for
12-13 and going forward. It is not a requirement under legislation, but a request from HMRC.

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?

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?