HMRC’s recently published guidelines on reporting and payment of tax on dividends and capital gains.

On 30 July 2024, HMRC published its Employment Related Securities Bulletin 56 (July 2024), aimed at employees, describing the ways to report and pay tax on dividends and capital gains tax. This bulletin can be accessed from Employment related securities bulletin 56 July-2024. 

Dividends

In respect of receipt of dividends:

• dividends received over £10,000 in a tax year would need to be reported via the self-assessment returns
• dividends received up to £10,000 in a tax year can be reported
• by self-assessment, especially if one is required to file self-assessment returns in any event
• by contacting HMRC to change the PAYE tax code so that the tax may be collected through the payroll (which would otherwise avoid filing tax returns)
• by contacting HMRC through the general enquiries helpline

Capital gains

In respect of capital gains, reporting may be done through:

• the self-assessment returns;
• on-line reporting using the ‘real time’ capital gains tax service (for UK residents and in most cases (except in certain circumstances), when gains are made

The bulletin further stresses the importance of record keeping as details about the gain would need to be provided,

Our observation

This bulletin is a guide to the ways dividends and gains can be reported and paid, especially by employees in relation to their employment-related securities which they acquire through their participation in employee share incentive plans operated by their employer.

The reduction of the tax-free dividend and capital gains annual allowances has increased the reporting and tax burden of employees, mainly, who may not otherwise need to file self-assessment returns.

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