Hi Everyone
For anyone who still has to fill in their tax return this year, there is a little 'gotcha' in this year's form that you should be aware of, at least if you have any income from share dividends.
When I filled in my tax calculation guide recently, it told me that the amount of tax I owed was about 3000 more than I thought it should be. After thoroughly checking the form and being unable to find out why the final figure was so high, I phoned the HMRC helpline, and they explained that there was a misprint on the form. The effect of the misprint was to ignore the tax credit on any share dividends, so that effectively you end up paying tax on dividends twice over.
For me, this misprint had pretty obvious consequences, as I run my own company and take most of my income as dividends, so paying tax twice on my dividends was not something I was ever not going to notice. But I do worry that there are probably a lot of people out there who own small amounts of shares and would only pay small amounts of extra tax if the dividends were taxed twice, which they could easily miss. If you think that's you, then be careful! I think the mistake has been corrected in the latest tax calculation guide, so make sure you download the latest version from the HMRC website and don't use the one they sent you in the post.
Personally, I generally go for the c*ck-up theory every time, but if you were a conspiracy theorist you'd have to wonder whether this was another of New Labour's stealth taxes.
Best wishes Adam