Dividend allowance causes problem for HMRC’s systems

HMRC’s self-assessment software for 2016-17 contains a specification error affecting the dividend and personal savings allowances introduced in April 2016. It affects taxpayers who file online using HMRC’s software or third-party packages.

The department is working to fix the problem and has added these situations to its list of self-assessment individual exclusions for online filing for 2016-17:

‘51 – Where the customer has non-savings income less than the personal allowance and savings starting rate (SSR) (£16 000) plus savings income not covered by any personal savings allowance they are entitled to the SSR of £5 000 is not being given.

‘52 – Some customers who have non- savings/savings/dividend income and their income exceeds the basic rate band (BRB) the calculator is incorrectly reducing the higher rate band by the £5 000 dividend allowance rather than by the amount of the allowance not used in the BRB.’

In each circumstance ...