Telling HMRC about Dividend Income

Thanks to the £1000 limit for 2023-2034 dividend income I'm going to be over it.

I'm PAYE and still a basic rate taxpayer just about and I don't complete a self-assessment as I don't need to.

The dividend income was £1700 or so.

From what I can work out I need to login on the HMRC tax portal and use the "Add missing investment income" option.

Does anyone know if that's definitely the right/best way to do it?

Do I need to do it now or could/should I wait until the end of the 2023-2024 tax year and do it in one go once I have my tax certs from the likes of HL and IWeb as they're the two platforms I've had unwrapped accounts with during this tax year.

I don't mind paying the tax but being 100% confident of the correct process is painful 😣
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Comments

  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 12,702
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    It really depends when you want to pay the tax.

    If you are happy paying asap make the update now and then a further one after 5 April when you know the final figures.  That way HMRC will start collecting the tax owed during the current tax year.

    Alternatively wait until you have the definitive figures after 5 April and update them them.  As far as 2023-24 is concerned you will then get a calculation later in the summer showing the tax due and it wouldn't normally start to be collected until 6 April 2025 (2025-26 tax code).

    Likelihood is the (provisional) tax due for 2024-25 will be paid before the tax for 2023-24 😳.

  • Aminatidi
    Aminatidi Posts: 508
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    It's only a small amount as the dividend is only £1700 and I don't think there's another divi this financial year (the fund is HSBC Global Strategy Balanced Portfolio C Inc).

    If I had the choice it would either be deducted by the platform or I'd be able to just get a debit card out and pay it but I think what you're saying is it makes sense to wait until after the 2023-2024 tax certs drop from the platforms and then do it all in one hit?

    To be clear I don't care about paying the tax whole point is I want to make sure I pay the right amount and don't miss paying it :)
  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 12,702
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    edited 14 January at 2:54PM
    Aminatidi said:
    It's only a small amount as the dividend is only £1700 and I don't think there's another divi this financial year (the fund is HSBC Global Strategy Balanced Portfolio C Inc).

    If I had the choice it would either be deducted by the platform or I'd be able to just get a debit card out and pay it but I think what you're saying is it makes sense to wait until after the 2023-2024 tax certs drop from the platforms and then do it all in one hit?

    To be clear I don't care about paying the tax whole point is I want to make sure I pay the right amount and don't miss paying it :)

    Once you get the calculation (a P800) you will be able to pay it anytime before January/February 2025 and that will prevent it from being included in your 2025-26 tax code (the tax owed from 2023-24).

    Don't forget once notified HMRC will start including provisional amounts for the dividend income in your current tax code.

    For 2024-25 you will have £500 taxed at 0% and £1,200 taxed at 8.75% so a tax code adjustment to collect the tax will be made later this summer.
  • Aminatidi
    Aminatidi Posts: 508
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    edited 14 January at 3:24PM
    Thank you so silly question but how do I get the P800 and how do I actually pay it?

    It's the mechanics that are still a little bit unclear as even the HMRC website asks unclear questions like "has the payment finished?" when you declare a UK dividend.

    Also do they want to know the individual dividend amounts or if there's a £1700 and a £800 one do they just want one declaration of £2500 (there was an additional dividend from my previous platform that I hadn't spotted).

    It's 2024 I was really hoping we'd got to a point where I could visit a HMRC website tell it "I received £2500 in dividend payments" and as HMRC know all about me it would ask me if I wanted to use a debit card or Apple Pay to pay the tax.

    Sorry but it just doesn't seem as simple as it should be.

    I live in hope... 😀
  • GeoffTF
    GeoffTF Posts: 1,327
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    Here is a helpful article:
    Provided that the dividend payments are less than £10K you can phone HMRC, but you might have to hang on the phone for ages and then be cut off. It might be better to use Self Assessment.
  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 12,702
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    edited 14 January at 4:16PM
    Aminatidi said:
    Thank you so silly question but how do I get the P800 and how do I actually pay it?

    It's the mechanics that are still a little bit unclear as even the HMRC website asks unclear questions like "has the payment finished?" when you declare a UK dividend.

    Also do they want to know the individual dividend amounts or if there's a £1700 and a £800 one do they just want one declaration of £2500 (there was an additional dividend from my previous platform that I hadn't spotted).

    It's 2024 I was really hoping we'd got to a point where I could visit a HMRC website tell it "I received £2500 in dividend payments" and as HMRC know all about me it would ask me if I wanted to use a debit card or Apple Pay to pay the tax.

    Sorry but it just doesn't seem as simple as it should be.

    I live in hope... 😀
    HMRC will automatically issue the P800 when they review your tax position for 2023-24.

    This usually happens in the summer/autumn after the end of the tax year.

    If you agree with the calculation then you can pay the tax via your Personal Tax Account.  If you don't pay it it will be included in your 2025-26 tax code.

    The alternative, where collection via your tax code isn't possible is that HMRC will issue a PA302 Simple Assessment calculation and you have to pay the tax direct to HMRC by 31 January 2025 (or 3 months after the PA302 is issued if it's close to 31 January).
  • Aminatidi
    Aminatidi Posts: 508
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    I'm fine paying them direct.

    All I want to do is say to them "I've received £2500 worth of dividends so there's some tax due here's my debit card".

    Can I do that?

    I'd like to think I'm reasonably intelligent but this all sounds archaic just for a bit of tax on some dividends.
  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 12,702
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    Aminatidi said:
    I'm fine paying them direct.

    All I want to do is say to them "I've received £2500 worth of dividends so there's some tax due here's my debit card".

    Can I do that?

    I'd like to think I'm reasonably intelligent but this all sounds archaic just for a bit of tax on some dividends.
    No, the liability from £2,500 of dividend income can vary widely so as I understand it HMRC will only give you the option to pay tax online if there is something to pay.

    Obviously they can't stop you sending a cheque through the post of you really want to but that won't alter the process HMRC follow.

    And just to avoid possible confusion HMRC never include tax you pay direct to them in a tax calculation.  So even if you did pay first you would still get a calculation.
  • Aminatidi
    Aminatidi Posts: 508
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    Thank you so it sounds like wait until I get tax certs from the platforms just to have 100% correct figures for the year, then report through the HMRC Personal Tax Account portal.

    Then wait for them to issue a calculation (P800) then I can pay it?

    This sounds medieval.

    Wonder if they'll change the process given more people will presumably be sucked into this with the lower dividend allowance.

    Hopefully it came across in the tone but I'm very grateful for the replies the frustration is at the HMRC process 😕
  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 12,702
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    Aminatidi said:
    Thank you so it sounds like wait until I get tax certs from the platforms just to have 100% correct figures for the year, then report through the HMRC Personal Tax Account portal.

    Then wait for them to issue a calculation (P800) then I can pay it?

    This sounds medieval.

    Wonder if they'll change the process given more people will presumably be sucked into this with the lower dividend allowance.

    Hopefully it came across in the tone but I'm very grateful for the replies the frustration is at the HMRC process 😕

    I'm not really sure what the big issue is 🤔.

    HMRC cannot know how much the tax liability will be until they have all your details for that tax year.  Same if you were in Self Assessment, the liability would only be determined when you filed your tax return.

    Even if you could pay in year, like with some CGT transactions, it's only ever provisional, the final position is determined after the end of the tax year.

    Dividend income has some unusual quirks like loss of Marriage Allowance where you are deemed to be a higher rate payer despite not being charged any higher rate tax 😳
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