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Posted Thu, 28 Apr 2022 19:00:40 GMT by Diane Lingham
I have completed my 2022 Self Assessment return online using HMRC's software and the tax calculation is incorrect. The dividends are not shown separately in the tax calculation and so are being taxed at the 20% rate. Even when I only include 2,000 they are not being shown separately to show them at 0%. Also the basic rate band is not being increased correctly to account for the higher rate relief from my pension and gift aid payments. Any ideas? I have triple checked that the correct boxes are completed. The tax calculation shows the right amount of relief to be given but the basic rate band figure is not reflecting these amounts. Any ideas?
Posted Wed, 04 May 2022 08:19:39 GMT by HMRC Admin 17

Without seeing the calculation I wouldnt be able to explain why it was allocating any differently, if you have submitted the return contact our Self Assessment department and we can view the calculation:

Self Assessment: general enquiries     .

Thank you.
Posted Wed, 04 May 2022 17:49:34 GMT by Diane Lingham
So would you suggest I submit an incorrect return and then contact you to find out why the calculation is wrong?
Posted Fri, 06 May 2022 08:21:22 GMT by HMRC Admin 2

If the calculation still seems to be wrong, we would advise to submit the return and contact our helpline after 72 hours.

We can then view the calculation to check if it is correct.

If the return has been completed incorrectly, we can give advice on how to amend the return.

Self Assessment: general enquiries

Thank you.
Posted Sun, 24 Jul 2022 15:22:44 GMT by formfiller
Hi there, I have the same or a very similar issue. The calculation page seems to add all dividend income to the income tax payable at my marginal tax rate. It is not applying the £2,000 tax allowance on dividends and also not applying the lower marginal rates for dividend taxation. It's just treating it as fully taxable income rather than applying the rules as stated here: Wondering if the original poster managed to get this resolved? Have others spotted this issue? It seems like quite a basic oversight.
Posted Wed, 21 Sep 2022 10:49:54 GMT by Denise Wood
I am completing tax returns for my clients...I have been testing the calculations with various scenarios and I am finding that, if you are a higher rate taxpayer, the calculation is taxing dividends between the £2000 allowance and the basic rate tax band at 20% not 7.5%, and then the rest at 32.5%. This does not seem correct.
Posted Thu, 22 Sep 2022 12:41:26 GMT by formfiller
I saw the reply so thought I'd update with my resolution. I spent an hour on the phone to HMRC. It took a while for them to get to the bottom of it but it was ultimately correct. The calculation as shown did not show an additional charge for me related to prior year expenses and this accounted for the extra tax. It was also unclear from the calculation shown what the line item amount for dividend tax was.
Posted Sun, 25 Sep 2022 08:56:24 GMT by Diane Lingham
I still need to phone HMRC to review the calculation but the thought of being on the phone for an hour is rather discouraging, especially when adding on the other hour to actually get through to someone ... @formfiller, glad to hear your issue was resolved, but I am not aware of having any prior year adjustments that need to be accounted for. @Denise Wood, I agree so if HMRC can explain why, I will report back
Posted Mon, 26 Sep 2022 08:15:43 GMT by HMRC Admin 17


Denise Wood,
If you have completed returns and the calculations are correct, please send us a letter detailing your calculation and we can escalate this:

Self Assessment: general enquiries   .

Thank you.
Posted Sat, 03 Dec 2022 10:18:35 GMT by Fiona Bailey
Hi, I completed my tax return 2021-22 mid April 2022 and have just received my tax calculation. It does NOT resemble the tax return I submitted (and I have gone back online to check). Whilst my salary income and tax paid is correct - it excludes my dividends (except the £2000) tax free, my business expenses are inaccurate, it ignores my charitable donations and finally no reference to my VCT (and associated tax relief). How do I get this resolved. The message on the phone said there were problems with the phone line and I can't find anywhere to email / report the issue despite spending an hour on the HMRC page looking?? Thanks
Posted Tue, 06 Dec 2022 16:47:02 GMT by HMRC Admin 32

We were having issues with our helplines but they are now reopened.

If the calculation does not match the return you sent in, we need to refer this to the processing office to review the return.

Self Assessment: general enquiries

Thank you.
Posted Sat, 24 Dec 2022 11:42:04 GMT by Jackie987
I have just had a similar problem with my tax return for 21/2. I had the same problem with the 20/1 tax return and followed the suggestions of submitting the return as it was and waiting 72 hours to call back, but without any satisfaction. It is as though the self assessment software automatically allocates part of the personal allowance against dividend income, so that the basic rate band is all taxed at 20% rather than some at 20% and some at 7.5%
Posted Mon, 09 Jan 2023 19:17:14 GMT by MagsD
I also seem to have a similar problem with 2021/22 tax return. Tax is being calculated on 2,000 GBP dividend allowance free value. The return seems to be adding 2,000 GBP to a total income taxable value for the year and then calculating extra tax on this amount. Is there a known glitch with the return for 2021/22? My circumstances are very straightforward. I have one full time employment (higher tax rate) and I'm a director of a limited company. I'm not paying myself directors' salary, just drawing 2,000 GBP dividends. I have updated relevant fields of the tax return form: Full time employment details with pay to date and tax to date and, 2,000 GBP dividends in section "Did you receive any dividends, for example, from UK companies, authorised unit trusts, open-ended investment companies, foreign companies (up to £2,000)? " I've triple checked and I cannot see any other relevant fields I might have missed or needing updating specific to my earnings. Any help on the above would be much appreciated.
Posted Fri, 13 Jan 2023 11:46:05 GMT by HMRC Admin 19

The calculation will include this as the taxable income, but there should also be a section where it states that £2000 is being taxed at 0%.

Thank you.
Posted Sat, 14 Jan 2023 11:37:42 GMT by Cameron Prentice
WarningThis post is currently being moderated and will be visible when it has been approved by a HMRC moderator.
Posted Wed, 18 Jan 2023 13:48:30 GMT by HMRC Admin 25
Hi Cameron Prentice,

It should be showing as £2000 taxed at 0%.

If you can't see this please contact our helpline 72 hours after submitting your tax return.

Self Assessment: general enquiries

Thank you. 

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