Do I have to disclose overseas income that's below my personal tax allowance

Question

There was a section on BBC Radio 4 Money Box recently about the dire consequences of not disclosing overseas income to HMRC before their "amnesty" runs out in September. The details are on the HMRC web site.

For the last few years, I have been receiving a few hundred pounds a year in share dividends from the USA. At no point has this ever exceeded my dividend allowance for the year, listed at HMRC tax on dividends.

So do I have to fill out extra tax forms to tell the HMRC that I'm not receiving enough money to pay tax on it, or can I just say nothing? Throughout my working life, I've always been on PAYE and never had to fill out any tax forms, and I'd like to keep it that way.

Answer 1

I can't find a definitive statement, but in general HMRC don't seem to want to know if you have undeclared income that no tax is owed on.

For example https://www.gov.uk/undeclared-income says (emphasis mine):

Tell HM Revenue and Customs (HMRC) as soon as possible if you’ve made money you need to pay tax on and haven’t told them about it.

The tax on dividends page you already linked to (https://www.gov.uk/tax-on-dividends) says:

If you need to pay tax, how you pay depends on the amount of dividend income you got in the tax year.

That said, there was no dividend allowance before April 2016, but basic-rate taxpayers were taxed at 0%. If you were a higher-rate tax payer before that time, or if the dividends would have been enough to push you into the higher-rate band (i.e. you were only a few hundred pounds under it), then you would owe tax. In that case you should voluntarily disclose it as quickly as possible to minimise the consequences.