Dividend from Vodafone Shares - reinvested. Tax Liability??

C

CarPark

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Hi,
I have some Vodafone shares. Every year I get a small dividend from them, and that money is automatically used to buy new shares. I don't ever actually get a cheque (or cash) for the amount of the dividend. To give you an idea of the scale of dividend, in 2012, my dividend was GBP$43.
I have not declared this for tax purposes.
I am a PAYE worker.

a) Given that the dividend is automatically reinvested, do I need to declare this for tax purposes?
b) Am I liable for tax on this dividend (even though it is reinvested)
c) If yes to a) and b), how much trouble am I am for not declaring it before now?
Thanks
 
This is referred to a scrip dividend and yes it is taxable.

It is taxable on the net amount of the dividend plus attaching tax credit. You will be able to get full information from the communication you received from Vodafone. If you want to file a tax return put the net amount of the dividend in box 24 of a 2012 Form 12. The link is here: http://www.revenue.ie/en/tax/it/tax-return-forms.html

Don't forget that you will need to convert the amount to Euro on the date that the dividend was paid. You can also use an average exchange rate issued by the Revenue for 2012 - either way with STG£43 it is not going to be a big amount.

As the dividend was small I don't think you will be in too much trouble.
 
Dublin66, Thanks for your help.
A few more questions arise, if you have a few minutes.

My holding is 616 shares. Dividend rate is 7.05p (sterling), so dividend payable is GBP£43.42.

What do you mean by "net amount of the dividend"?

Also, the voucher mentions that this has a GBP£4.82 tax credit. What does that mean and does it only apply for the purposes of UK revenue?

Based on the figures above, what would i enter in box 24 of form 12?

I guess that submitting info on a dividend in 2012 may prompt questions about a dividend in 2011, 2010, 2009 etc, so i guess it is best to make a full disclosure now. Do i just write them a letter detailing all of the dividends that i have received from Vodafone or how should i proceed with the years before 2012?
 
Uk dividends are taxed on the amount actually received with no credit for UK tax. [broken link removed]
 
You would be taxed on the value of the dividend you would have received. Box 24 asks for the net amount which would be the Euro equivalent of £43.42. Joe 90 makes a good point there re tax credit. The balancing statement will take account of this provided you put in the correct figure.

If you want to correct the position I would be inclined to file Form 12s for each of the year as opposed to a letter. I don't think the amounts are big enough for them to even write a letter in my opinion. Use some of the software around to calculate your tax as you don't want to find out that you have a tax liability for any other reason. On the other hand you could also be due a refund due to medical expenses, bin charges, trade union subs or any other number of small tax credits that you be entitled to but never claimed. Happy filing.
 
There was a similar question in some newspaper a month or two ago.

The reply indicated that in the case of small dividends and you're not already submitting tax returns then you can contact revenue and they may choose to arrange the payment via doing something like adjusting your credits.

I could be wrong on this as I can't remember the details. Still if you're not already filling in forms it might be worth ringing them.
 
Thanks for all of the responses. So based on the above, I have a plan of action for the Vodafone shares. Now I just need to figure out how far back they can go, and if I need to address the Eircom shares that preceded the Vodafone shares.
 
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