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Where Taxpayers and Advisers Meet

Dividends Personal Allowance in Tax Returns

Lextar
Posts: 6
Joined: Tue Sep 04, 2018 12:48 pm

Dividends Personal Allowance in Tax Returns

Postby Lextar » Thu Oct 18, 2018 12:37 pm

So I noticed in my previous year's tax return that I included my ISA dividends in with the none ISA dividends when asked how much I got.

1) dividends from a Shares ISA don't need to be included in tax return?

2) Is the personal allowance for dividends automatically factored in when they calculate tax?

3) As the total of my dividend from my ISA and none ISA is >2K that I filed... I assume there is no point in trying to correct it?

robbob
Posts: 2628
Joined: Wed Aug 06, 2008 4:01 pm

Re: Dividends Personal Allowance in Tax Returns

Postby robbob » Thu Oct 18, 2018 1:56 pm

1) dividends from a Shares ISA don't need to be included in tax return?
That is correct
2) Is the personal allowance for dividends automatically factored in when they calculate tax?
If you are not met with one of the online exclusion cases i would expect that any "decent" calculator would "allocate" allowances as best suits you.
Note there are 90 situations where hmrc calculations dont add up so you need to send them paper return if you want them to calculate lowest possible tax bill (correct bill)- generally all approved calculators must use the incorrect hmrc totals if its one of the 90, however these calculators may give you an indication that the calcs are wrong if you are lucky. i would expect that basic generic online calculators would not get the right answers alot of the time - there alot going on with regard to the calculation - there was a fantastic calculator on this website that was the best - but i guess it gets impossible to update when hmrc can't ever correctly give us the correct procedures to follow.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/707897/2017-18-exc-indi-v1.pdf
3) As the total of my dividend from my ISA and none ISA is >2K that I filed... I assume there is no point in trying to correct it?
did you mean less than 2k? you said more than 2k

Potentially any incorrect figure could affect your tax - an example would be 50k salary and 2k dividends when you suffer child benefit tax charge thingymabob - most likely if its under 2k tax will probably be the same. Tax credits / student finance etc though may want to know - if that is the case it makes sense to correct.

To me if you have include 1900 too much in dividends its best to correct the return whatever time limits permitting - worst case scenario you give your sa302 to mortgage company and they give you a loan based on a higher income than you have actually received - they would not be best pleased if they suspected this was deliberate error that you knew about didnt action (this is more about future sa302s rather than one you may already have used due to genuine oversight)

Lextar
Posts: 6
Joined: Tue Sep 04, 2018 12:48 pm

Re: Dividends Personal Allowance in Tax Returns

Postby Lextar » Mon Nov 05, 2018 9:12 am

2) I guess the best thing I can do is to trust HMRC as long as I submit the correct income.

3) oops my typo. Yes, my dividends is less than 2k. I included the dividends ~£500 from the shares in an ISA.

I earn on the border of basic and higher tax rate pending the bonus and changes in the bands :( Seems like one years I'm over and the next I'm under and following I'm over again. Not near 50K to affect child benefit... assuming that hasn't changed.

Thanks for the info.


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