HMRC has recently started another ‘One to Many’ campaign and from 4 February 2024, HMRC has been writing letters to individuals about potentially undeclared dividend income.
This latest campaign by HMRC has been forced from a decline in company reserves, despite reported profits, suggesting dividends have been paid.
Dividend income is not taxed at source, and so it is the responsibility of the individual in receipt of such income to ensure the correct income tax has been paid upon it.
Individuals are urged to acknowledge any letters received, whether or not they believe there has been an under declaration of dividend income. Individuals that have no additional dividend income to declare, should advise HMRC by responding via the telephone number or email address provided on the letter. For those individuals with additional dividend income to declare, HMRC recommends utilising an online disclosure facility. The letters do not mention alternative disclosure options, such as the contractual disclosure facility, which is more suitable for instances of tax fraud.
Failure to respond to any letters received altogether could result in HMRC initiating an unwanted compliance check, leading to the possibility of higher penalties if undeclared dividend income is discovered as a result.
This campaign once again reiterates the importance of prompt and accurate reporting.
If you have received any letters from HMRC in respect of this campaign, and require assistance with your reply, please do not hesitate to contact one of our personal tax team.
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