It has emerged that non–resident trusts which received dividend payments in 2016/17 may not have been given the correct tax relief. This means they have potentially overpaid tax.
HMRC’s website states that from 6th April 2016: non-resident trustees are entitled to 7.5% dividend tax credits under Section 399 ITTOIA on any dividends that are included in their taxable income.
However, HMRC’s trust calculation did not take this into account for the tax year 2016/17 resulting in a potential tax overpayment for non-resident trusts which received dividend income during the 2016/17 tax year.
What HMRC have said
HMRC have informed BTCSoftware that:
“We are aware that there are 2016-17 Trust Tax Returns affected by this.
We are working hard to identify those customers that are not aware they are affected or have yet to contact us and will take appropriate remedial action.
At this stage, we have no plans to issue a blanket communication to customers.”
How BTCSoftware has responded
The BTCSoftware team feel it’s important to inform taxpayers who may be affected by this, hence this update. We have also requested that HMRC contact trusts directly affected by this.
The BTCSoftware development team first contacted HMRC regarding this issue in May 2018 and have been repeatedly requesting for this to be corrected.
If you believe that your clients are affected by this issue, please contact HMRC directly so that they can re-calculate the returns and issue a refund for any tax overpaid.
Please note that HMRC have resolved this in the 2017/18 trust tax calculation.
BTCSoftware’s continued commitment supporting accountants and their practices
BTCSoftware’s core focus has always been to support accountants and their practices by providing software that is robust and compliant together with outstanding support. BTCSoftware, as always, will continue to work closely with HMRC to ensure that we are always fully up to date with the latest tax legislation.
If you have any questions relating to your software or would like a one-to-one demonstration of any of our products, including the BTCHub, please contact the sales team at e: sales@btcsoftware.co.uk or t: 0345 241 5030 for full details or a Free Trial.
