Do I owe Dividend Tax?

Dazed_and_C0nfused

HUMBUG said:

Dazed_and_C0nfused said:

Estimated tax you owe this year £6711

That makes no sense.  Are you certain you haven't misunderstood your tax code and that the £6,711 isn't a tax code deduction to collect a much smaller amount of estimated tax you owe for the current tax year??

Apologies - yes they have mentioned that my 'Company Pension' will only be sent the tax code .

The previous tax code was K1140X  and now they've changed it to K457X 

I haven't got a clue where they got the first estimate £11521  and now changed it to £6711.  I sent them a letter several weeks ago to provide a detailed explanation for the £11521 but they haven't replied back yet. Now they've changed their estimate again which has caused even more confusion.

Are you saying that the estimated tax underpaid is £6,711?

I honestly think you need to read your tax code more carefully as nothing you have posted suggests you have understand that element of your tax code.

MattMattMattUK

HUMBUG said:

I've worked out that my total wage/salary this year will be :
Company Pension :  £10255
State Pension: £5511
Taxable Interest on savings and investments : £12552
Total Taxable Dividend : £2045

Just checking, but are you sure your state pension is only £5,511 for a full year? Are you not entitled to the full state pension or is there an error there?
When you say taxable interest in savings and investments of £12,552, what is the total interest received that is not in an ISA? 
When you say taxable dividend of £2,045 what is the total dividend received? 

HUMBUG

Dazed_and_C0nfused said:

I've worked out that my total wage/salary this year will be :
Company Pension : £10255
State Pension: £5511
Taxable Interest on savings and investments : £12552
Total Taxable Dividend : £2045

Have you told HMRC that you expect to receive £12,552 in untaxed interest in the current tax year?  If not then they will just be using the figures from 2023-24 as the estimate for the current tax year.

That is perfectly normal and you don't need to provide your own estimate.  You can do if you wish but you don't have to.

I haven't told them yet but I've requested a self assessment tax return for 2023/24  and will do the same for 2024/25. 

I understand that HMRC should be getting my untaxed interest information for my non-Isa accounts  (direct from the banks)  but I've had letters from one of my banks saying they sent my ISA interest in error to them. So I wish to double-check they are not overtaxing me.  

Dazed_and_C0nfused

HUMBUG said:

Dazed_and_C0nfused said:

I've worked out that my total wage/salary this year will be :
Company Pension : £10255
State Pension: £5511
Taxable Interest on savings and investments : £12552
Total Taxable Dividend : £2045

Have you told HMRC that you expect to receive £12,552 in untaxed interest in the current tax year?  If not then they will just be using the figures from 2023-24 as the estimate for the current tax year.

That is perfectly normal and you don't need to provide your own estimate.  You can do if you wish but you don't have to.

I haven't told them yet but I've requested a self assessment tax return for 2023/24  and will do the same for 2024/25. 

I understand that HMRC should be getting my untaxed interest information for my non-Isa accounts  (direct from the banks)  but I've had letters from one of my banks saying they sent my ISA interest in error to them. So I wish to double-check they are not overtaxing me.  

They should be getting both I would think, but the ISA interest should be reported separately so you aren't taxed on it.

But if you are completing Self Assessment tax returns you will only pay tax on what you declare, nothing else.  Unless HMRC investigate your return of course and find you have neglected to include some income 😳

HUMBUG

MattMattMattUK said:

HUMBUG said:

I've worked out that my total wage/salary this year will be :
Company Pension :  £10255
State Pension: £5511
Taxable Interest on savings and investments : £12552
Total Taxable Dividend : £2045

Just checking, but are you sure your state pension is only £5,511 for a full year? Are you not entitled to the full state pension or is there an error there?
When you say taxable interest in savings and investments of £12,552, what is the total interest received that is not in an ISA? 
When you say taxable dividend of £2,045 what is the total dividend received? 

I started receiving my state pension this October.

Yes , this is interest on non-isa accounts mainly on money I inherited . 
The 2045  is the total dividend I expect to receive this year from sharesave shares (which I purchased when working for my previous employee).

HUMBUG

Dazed_and_C0nfused said:

HUMBUG said:

Dazed_and_C0nfused said:

I've worked out that my total wage/salary this year will be :
Company Pension : £10255
State Pension: £5511
Taxable Interest on savings and investments : £12552
Total Taxable Dividend : £2045

Have you told HMRC that you expect to receive £12,552 in untaxed interest in the current tax year?  If not then they will just be using the figures from 2023-24 as the estimate for the current tax year.

That is perfectly normal and you don't need to provide your own estimate.  You can do if you wish but you don't have to.

I haven't told them yet but I've requested a self assessment tax return for 2023/24  and will do the same for 2024/25. 

I understand that HMRC should be getting my untaxed interest information for my non-Isa accounts  (direct from the banks)  but I've had letters from one of my banks saying they sent my ISA interest in error to them. So I wish to double-check they are not overtaxing me.  

They should be getting both I would think, but the ISA interest should be reported separately so you aren't taxed on it.

But if you are completing Self Assessment tax returns you will only pay tax on what you declare, nothing else.  Unless HMRC investigate your return of course and find you have neglected to include some income 😳

I've been living on my company pension averaging £10k pa for 10 years and that is my only source of income apart from living on my savings and share dividends. Obviously, now I have the added State Pension which takes me over my personal income tax allowance and I certainly didn't earn enough interest from my savings/dividends in previous years that couldn't be offset by the 'Starting Savings Rate ',  'Personal Savings Allowance' and 'Dividend Allowance'.

HUMBUG

I think I might just have to wait for HMRC to reply back to my letter asking them to explain their figures. 

Many thanks for your assistance.

Dazed_and_C0nfused

HUMBUG said:

I think I might just have to wait for HMRC to reply back to my letter asking them to explain their figures. 

Many thanks for your assistance.

All they will (can) say is that estimated tax was calculated because your previous tax code (the one before K1140) reduced significantly and they have estimated the extra (estimated) tax due based on those changes.

For example I'm guessing the K1140 code took into account at least the following changes,

Tax owed on your State Pension from April to when your tax code was first changed to include it

Tax owed on untaxed interest when the tax code deduction was increased to reflect the latest updated figures.

Not sure what more you want really and given your tax code has been changed again what happened with the K1140 one is pretty much immaterial now.

DRS1

How comes your Company Pension Earnings went down?

HUMBUG

DRS1 said:

How comes your Company Pension Earnings went down?

How did you know that from my previous posts? 

Yes, you are correct ,  my Company Pension reduced by £900 a year due them opting out of SERPS and then opting back in again many years ago. Apparently there was some agreement that once I reach State Pension age, some formula would be used to either reduce or increase my Company Pension.