A worried client has sent me a letter she has received from TCO which implies that she had wrongly completed her Tax Credit form for 2016/17 because she had declared dividends on her Tax Return 2016/17. Her husband and she received a total of £300 in dividends so there was, correctly, a £nil entry for other income on the TCO form. I suspect that HMRC have compared their data on other income from TRs with their data from TCO but have not excluded the first £300. is this another example of non-joined up thinking by HMRC? Are the TCO fit for purpose?
The second page of the letter goes onto say that one should add the tax credit to any dividends received. Are HMRC out of date with the rules on dividends?