My understanding of this rule, currently, is that you don’t have to report admin period income to HMRC if the only untaxed income is interest and the tax bill is less than £100. I have never understood why it should only apply to interest, and not dividends for example, but recently I duly reported some modest estate income to HMRC which included dividends. The tax bill was about £40, but I retained a sum to pay it.
I have now received a letter from HMRC confirming that my calculations are correct but that as the amount to pay is small, we don’t have to pay it. There is no reference in the letter to current practice, or how much tax is regarded as “small” for this purpose, but I assume it might be anything up to £100.
I just wondered whether this represents an extension of the current rule, and/or whether it is now standard HMRC practice?
Diana Smart
Gordons LLP