Income Tax Query

I am a PAYE worker and own some shares to the value of Approx €10K.

I have been paid some dividends approximately €150. I am worried that I may owe some tax on this.

The same happened last year and I got a form back from the revenue stating an underpayment of tax of about the same amount. They also stated on the form that I don't need to take any action at that time.

If I am under paying tax will it effect me when I go to claim morgtage interest relief in relation to a house I just purchased. Is it possible just to do a paymnet to the revenue of say €100 just to cover any possible monies I might owe.

Dividends are taxed at source at 20%. ( Div Withholding Tax DWT ) . However if you are a higher rate taxpayer ( 41% ) then you owe the difference to Revenue. THat's how underpayments arise. Standard rate taxpayers have no problem as the DWT = the liability.

The only way to settle any amounts is to file an annual return get the balancing statement and Revenue will collect any u/payment by reducing your tax credits.

Mortgage interest relief is dealt with on TRS through a separate Revenue section and does not involve your normal PAYE file.

Thanks Graham
I pay tax at the higher rate. If I go to the PAYE self service website and declare the dividends I recieved during 2008 then the revenue to the rest in terms of collecting these taxes. I don't have to write a cheque and send to revenue. Am I right?

If you file through PAYE anytime on ROS then a balancing statement would issue for 2008. If you have an underpayment then Revenue will, depending on the amount of the underpayment either
- defer it
- collect it by reducing future tax credits or
- demand payment by cheque

Thanks Graham. That was all very helpful.