In the letter, HMRC asks the taxpayer to check that their ITSA tax return for 2023/24 includes the correct amount of dividend income. HMRC explains that the letter is not a compliance check and that a copy of the letter has been sent to the taxpayer’s adviser if they have one.
If the taxpayer finds that they have made an error on their return, they should amend the return by 31 January 2026, either by following HMRC’s guidance or by writing to HMRC at the address given in the letter.
Advice from ICAEW’s Tax Faculty
Although the letter focuses on UK dividends for 2023/24, taxpayers should ensure that they correct any and all errors on ITSA tax returns filed previously. HMRC’s guidance explains how to do this, including where the deadline for amending a return has passed. Common areas where errors may be made include overseas income, rental income and disposals for capital gains tax.
HMRC says that it will charge interest on any tax paid late and that it may charge a penalty where an error has been made. Where a penalty is charged, HMRC may apply a reduction depending on how helpful the taxpayer is in working with HMRC to correct the error. Further details are provided in the letter. Any disclosures are likely to be considered as prompted for penalty purposes.
The taxpayer does not need to take any further action if they are confident that their return is correct and complete.
Help with 2024/25 tax returns
HMRC’s letter is a timely reminder to ensure that all dividend income is reported in the tax return for 2024/25, which is due for submission by 31 January 2026. In the letter, HMRC explains that it sees “quite a few mistakes in this area on tax returns”. ICAEW is publishing a series of articles to help taxpayers and agents complete tax returns in the run up to the 31 January 2026 deadline.
Tax policy update
HM Treasury will be attending ICAEW's Annual Conference 2025 with a session discussing tax policy and economic growth in the weeks ahead of the Budget.
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