Help with UK Self Assessment

Hi All,

I'm finishing up my UK self assessment where I'm reporting dividend income from my Vanguard accounts, all of which are non-reporting funds. Two questions:

1) Do I need to include dividend income from my IRA account?
2) What are the penalties for late assessments? In my situation, I'm filing for April 2019-20 on time, but I didn't know I had to file until this year so 2017/18 and 2018/19 will be late. HMRC just asked that I write them a letter saying the amount earned for both years as it's very, very small (I owe less than £2 for this year, for example).

I know #2 might be hard to answer, but just wondering if anyone has any experience here. It wasn't intentional to not report and my first two years were rough so I really didn't have the headspace for figuring out UK tax law and was poorly informed by my British colleagues who just said taxes are automatically taken out through PAYE.

I don't know the answer to 2) but the answer to 1) is no.  The only time you will need to report your IRAs on your HMRC tax return is when you start taking distributions, and for that you will receive a 1099-R from the institution that holds your IRA. 

Thanks! Do you know where I can find that information in print? I'm on the phone with HMRC right now and they just said they weren't sure (and that's talking with a specialist advisor).

Thanks! Do you know where I can find that information in print? I'm on the phone with HMRC right now and they just said they weren't sure (and that's talking with a specialist advisor).

The first place to reference would be the US-UK Tax Treaty, section 17 on pensions. An IRA is just the same as a UK SIPP.

https://www.treasury.gov/resource-center/tax-policy/treaties/Documents/uktreaty.pdf

Technical explanation of Treaty

https://www.treasury.gov/resource-center/tax-policy/treaties/Documents/teus-uk.pdf

Thanks!  That's helpful.

Penalties.  https://www.gov.uk/self-assessment-tax-returns/penalties

Give it a good go explaining and apologising in your letter and maybe they will go easy on you. Good luck.

Yes, that's what the last HMRC advisor I spoke with suggested. He seemed pretty sympathetic and gave lots of tips for what to include in my letter.