Self Assessment - Question about including low Dividends

NigelFNg

Hi there, hoping that someone can help with a question as I am completing my Self Assessment form.
I have received some dividends in the region of £45 and I am confused towards whether I should include them on my Self Assessment or not.
I read that there is a "Dividend Allowance" of £2000 but when I add the £45 to my Self Assessment form, it increases the amount of Tax that I need to pay by about £20.
This suggests that there is no allowance.
Please can someone advise on if I enter the details or leave them off as they are below £2000.
Many thanks.

Dazed_and_C0nfused

There is no separate "allowance" for dividends.

There is a 0% rate band for dividends, confusingly known as the Dividend Allowance.

You have to include the taxable income on your return.

It is possible in niche circumstances for dividends taxed at 0% to increase your overall liability due to the knock on effect elsewhere.

Just compare your Self Assessment calculation before adding the dividends and after adding them to see where you are impacted.

Could well be loss of Personal Allowance or High Income Child Benefit Charge.

NigelFNg

Thanks. I was mis-reading the notes of "Dividend Allowance"
You also get a dividend allowance each year. You only pay tax on any dividend income above the dividend allowance.
https://www.gov.uk/tax-on-dividends
I was just looking at the overall figure. I do have a High Income Child Benefit Charge - I will check that in the detail later, thanks.

Dazed_and_C0nfused

Technically you do only pay tax on the dividends above £2,000 (the first £2,000 being taxed at 0%).

But that extra £45 forms part of your "adjusted net income" on which your Personal Allowance and the High Income Child Benefit Charge is based.

Tax does like to be taxing