If you’ve recently received a letter from HMRC asking you to check your Self Assessment for dividend income, don’t panic — you’re far from alone. Thousands of people across the UK have received similar letters as part of HMRC’s latest campaign to make sure everyone is declaring their income correctly.
These are known as nudge letters. They’re not formal investigations or accusations of wrongdoing — they’re reminders.
HMRC believes some of your dividend income from UK companies for the 2023–24 tax year might not have been declared. Rather than jumping straight into an investigation, they’re giving you the opportunity to review your return and correct it now. Here’s what’s going on, why the letter was sent, and what you should do about it.
What exactly does HMRC say in these dividend nudge letters?
HMRC’s letter is straightforward, though it can sound a bit formal. In essence, they’re asking you to double-check your Self Assessment tax return for the year ending 5 April 2024.
They’ve noticed a growing number of mistakes when it comes to reporting dividend income, so they’re urging taxpayers to review their returns and correct any errors by 31 January 2026.
The letter explains:
- You must include all dividend income from UK companies.
- If you missed something, you can amend your tax return online or in writing.
- If your return is already correct, there’s no need to do anything.
HMRC has also written to your tax adviser if you use one.
Why did HMRC send you a nudge letter?
HMRC has become much more sophisticated in the way it cross-checks financial data. Every year, it receives information from banks, investment platforms, and UK companies that pay dividends.
If what they see doesn’t match what you’ve reported in your Self Assessment, that discrepancy may trigger a letter.
It doesn’t necessarily mean you’ve done anything wrong. Many people forget to declare small dividend payments or assume they don’t need to be reported if they fall under the annual dividend allowance (£1,000 for 2023–24). Others may not realise that dividends from multiple shareholdings all count towards their taxable income.
In short, HMRC’s goal is to give you a chance to fix any unintentional omissions before they take further action.
Note that the dividend allowance drops to £500 for the tax year 2024-25 and 25-26.
What you need to do by 31 January 2026
The deadline to review and correct your 2023–24 Self Assessment return is 31 January 2026, but it’s better not to wait until the last minute. Here’s what HMRC expects you to do:
- Check your dividend income carefully.
Look through your dividend vouchers, brokerage statements, and any paperwork from companies you hold shares in. Make sure the figures match what you declared.
- Amend your return if needed.
If you spot something missing or incorrect, log into your HMRC online account and follow the instructions under “If you need to change your return.” You can also post your response or amendment to HMRC at the address included in the letter.
- Use the helpline if you need help.
HMRC has a dedicated phone line open until 30 November 2025 to help answer any questions.
- Do nothing if everything is correct.
If your Self Assessment already includes all your dividend income, you don’t need to contact HMRC — just keep your records in case they ask for proof later.
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What should you do if you receive one of these letters?
First things first: don’t ignore it. HMRC sends these letters because their systems suggest there might be an issue — and while they’re not accusing you of anything, failing to respond could raise a red flag later.
Here’s a simple approach:
- Read the letter in full. Take note of the tax year it covers and the action they’re asking you to take.
- Gather your paperwork. Collect dividend statements, vouchers, and records from your broker or investment platform.
- Compare your figures. Check what you’ve reported against what you’ve actually received.
- Amend if necessary. If something’s missing, correct it straight away — it’s quick and straightforward online.
- Keep copies. Store everything safely in case HMRC asks for evidence later.
What happens if you ignore the letter
While the letter itself isn’t a penalty, ignoring it could end up costing you. If HMRC later works out that you’ve under-declared income, they can add fines, charge interest, and in some cases open an investigation into your tax affairs.
The penalty amount depends on how HMRC views your error:
- Careless or accidental: Generally lighter penalties, especially if you sort things quickly.
- Deliberate or hidden: These come with higher fines, as HMRC views them as serious.
- You’ll also need to pay interest on any unpaid tax, which keeps building until the balance is cleared.
How to reduce or avoid penalties
HMRC is generally fair with taxpayers who admit errors and fix them quickly. Acting early can make a big difference — it might even save you from a fine altogether.
Here’s what you should do:
- Tell HMRC right away once you notice a problem.
- Explain clearly what went wrong.
- Update your return and pay any outstanding tax without delay.
By showing you’re trying to make things right, you’re far more likely to get a fair outcome — and far less likely to face any nasty surprises later.
How an accountant can help
If tax returns make your head spin, this is where an accountant can make all the difference.
A good accountant will:
- Review your return to check whether all dividend income is correctly declared.
- Identify any missing or misreported income across different investments.
- Help you amend your Self Assessment correctly.
- Communicate with HMRC on your behalf if you’d rather not deal with them directly.
- Offer ongoing advice so you don’t run into the same problem again next year.
Having a professional take a second look at your tax return can make all the difference. It not only gives you confidence that everything’s accurate, but it can also save you money by avoiding penalties or overpaid tax.
Conclusion
These dividend nudge letters are part of HMRC’s push to make tax reporting more accurate. They’re not meant to scare you — just to remind you to double-check your return.
If you’ve had one, take it seriously but stay calm. Review your Self Assessment, ensure all dividend income is declared, and make any fixes before 31 January 2026.
And if you’re uncertain about what to do, talk to a professional. A brief conversation with an accountant can often make the whole process much simpler.
