Underdeclared tax on dividends

I've realised that I owe some tax on dividends I received in the last 3 financial years. All my dividends are reinvested via the share platform and I didn't understand until now that I owe tax on these (they are not in an ISA). I don't do a tax return so I think I need to write to HMRC and declare the underpayment, it's around £80 each year. I hold my hands up I've no problem doing this but my question is will I get in any trouble? 

Also, I own some shares in United Utilities directly. They give the option to receive shares instead of dividends, do I need to declare these as well? I thought I did but I read a post on the HMRC forum that seems to suggest otherwise. 

Any help much appreciated!

Comments

  • masonic
    masonic Posts: 22,863
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    edited 23 January at 7:54AM
    You should be able to go back and amend your previous returns. You may have to pay interest on the underpaid tax.
    Not sure about your second question, it sounds like a dividend reinvestment scheme, in which case the income would need to be declared.
  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 12,773
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    edited 23 January at 8:11AM
    masonic said:
    You should be able to go back and amend your previous returns. You may have to pay interest on the underpaid tax.
    Not sure about your second question, it sounds like a dividend reinvestment scheme, in which case the income would need to be declared.
    I took this to mean the op hadn't filed a return for any of the years in question.

    I don't do a tax return so I think I need to write to HMRC and declare the underpayment, 

    Op, just send the details of all the taxable dividend income for each tax year to HMRC and they will review your tax liability for each year.

    Assuming you have no spare Personal Allowance all of the income will be taxed but the first £1,000 or £2,000 (depending on the tax year in question) will be taxed at 0%.
  • wmb194
    wmb194 Posts: 3,119
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    I've realised that I owe some tax on dividends I received in the last 3 financial years. All my dividends are reinvested via the share platform and I didn't understand until now that I owe tax on these (they are not in an ISA). I don't do a tax return so I think I need to write to HMRC and declare the underpayment, it's around £80 each year. I hold my hands up I've no problem doing this but my question is will I get in any trouble? 

    Also, I own some shares in United Utilities directly. They give the option to receive shares instead of dividends, do I need to declare these as well? I thought I did but I read a post on the HMRC forum that seems to suggest otherwise. 

    Any help much appreciated!
    A scrip dividend is still a dividend so yes, it needs to be declared.
  • Swipe
    Swipe Posts: 5,010
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    edited 23 January at 9:33AM
    Isn't the broker required to report dividend income and DRIP annually to HMRC?
  • masonic
    masonic Posts: 22,863
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    masonic said:
    You should be able to go back and amend your previous returns. You may have to pay interest on the underpaid tax.
    Not sure about your second question, it sounds like a dividend reinvestment scheme, in which case the income would need to be declared.
    I took this to mean the op hadn't filed a return for any of the years in question.

    I don't do a tax return so I think I need to write to HMRC and declare the underpayment,
    Yes, oops! Clearly missed the word "don't" when reading it the first time.
  • boingy
    boingy Posts: 1,164
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    When you say the underpayment is £80 each year do you mean that's the tax on dividends above the £1k/£2k allowance?
  • boingy said:
    When you say the underpayment is £80 each year do you mean that's the tax on dividends above the £1k/£2k allowance?
    Yes.

    Follow up question, how do I report this? When I write to HMRC do they want a detailed breakdown of who paid the dividends, or just an overall total for dividends received and then the tax due calculation?
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