Following the update of the guidance for the 2016/17 tax year a self assessment tax return is required where:
- your income from savings or investments was £10,000 or more before tax
- your income from share dividends was £10,000 or more before tax
The ICAEW, the professional body for accountants in England and Wales, has spotted that there is still a level of confusion as this begs the question about the process for those who have income from dividends and or interest which is below these limits but on which tax is due (e.g. because the income exceeds the personal savings allowance/dividend nil rate band). The information on gov.uk is incomplete on this point.
Untaxed income below the thresholds for self assessment must be reported to HMRC by phoning the HMRC contact centre (0300 200 3300) or the agent line.
Where possible HMRC will collect the tax due on this income by making an adjustment to the taxpayer’s PAYE tax code. Where this is not possible (because there is no source of income liable to PAYE, or the PAYE income is insufficient to take the adjustment, HMRC will put the taxpayer into self assessment and issue a tax return.
HMRC generally carries tax code adjustments for interest and dividends forward to subsequent tax years; in such cases it will be important to monitor tax codes and to notify HMRC if the amount of income changes.
Before contacting HMRC it is always worth taking expert advice on your personal tax situation so why not give the Bedrock team a call and we will do all we can to assist.
