HMRC Is Asking Taxpayers to Recheck Their Dividend Income
Some taxpayers have recently received letters from HMRC urging them to confirm that their 2023/24 self assessment tax returns include all dividend income. The letters open with wording along these lines:
“Please make sure your tax return included all your dividend income… We’ve seen quite a few mistakes in this area on tax returns, and we want to help you get this right. This letter isn’t a compliance check.”
Although HMRC emphasises that this is not a formal compliance check, the correspondence should not be ignored. It signals that HMRC is concerned about widespread inaccuracies — even if they do not currently hold any specific information about your situation.
Why HMRC Is Focusing on Dividends Now
A Tax Year Marked by Major Changes
The letters relate to the 2023/24 tax year, for which most returns were submitted by January 2025.
This was the first year in which the dividend allowance was cut in half, dropping from:
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£2,000 in 2022/23 → £1,000 in 2023/24, and then
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£1,000 → £500 for 2024/25
When these reductions were announced in the Autumn Statement 2022, HMRC projected:
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3.2 million people would be affected in 2023/24
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4.4 million people would be affected in 2024/25
These figures represent nearly three-quarters of all dividend recipients. The new letters suggest HMRC may not be seeing the reported dividend income levels they had anticipated.
The Reporting Problem: No Automatic Feed for Dividends
Why HMRC May Not Hold the Data They Need
Unlike bank interest — which is automatically reported to HMRC — dividends are not reported through any centralised system.
This gap exists largely because historically:
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Basic-rate taxpayers had no tax to pay on dividends
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This continued when dividend tax credits were replaced by the £5,000 dividend allowance in 2016
With the allowance now reduced to a fraction of that level, HMRC is increasingly reliant on taxpayers to report their dividend income correctly.
What To Do If You Receive an HMRC Dividend Letter
Steps to Take Before the Deadline
If you receive one of these letters:
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Review your 2023/24 dividend totals carefully
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Check the figures on your self assessment tax return
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If you spot an error, either:
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Amend your online tax return, or
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Write to HMRC
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Make sure any corrections are submitted by 31 January 2026
Struggling to Keep Track of Dividends?
If managing multiple investment accounts or dividend statements feels complex, it may be time to review:
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How your investments are structured
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Whether consolidation or an alternative holding method could improve clarity
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Whether tax-efficient wrappers such as ISAs could reduce admin and potential tax liability
A professional review can help streamline your approach and ensure your reporting is accurate.
Speak to Chartwell Wealth Management
Keeping track of income, allowances and tax changes can be challenging — especially when rules shift from year to year.
Chartwell Wealth Management can help you review your investments, manage dividend income efficiently and ensure your tax reporting remains accurate.
Get in touch today for clear, personalised guidance.
