Do I have to declare interest to the taxman?

fleeze69

Hi, I currently have a normal job as well as being self employed as a freelance web designer, I am wondering if I have to declare to the taxman the interest earned from any of my money that is left over (after freelance expenses) that I put into my Kaupthing Egde savings account, or is this already done by the bank?

The money I put into my savings account is partly from my wage from my normal job and partly from cheques that I receive via my freelance work.

Im I bit of a newbee to self assessments and can't really justify the expense of an accountant, I think im getting on okay, I just want to make sure I do everything properly and this is a question that has been playing on my mind, so any help would be greatly appreciated.

Thanks

Adam

ctdctd

fleeze69 wrote: »

Hi, I currently have a normal job as well as being self employed as a freelance web designer, I am wondering if I have to declare to the taxman the interest earned from any of my money that is left over (after freelance expenses) that I put into my Kaupthing Egde savings account, or is this already done by the bank?

The money I put into my savings account is partly from my wage from my normal job and partly from cheques that I receive via my freelance work.

Im I bit of a newbee to self assessments and can't really justify the expense of an accountant, I think im getting on okay, I just want to make sure I do everything properly and this is a question that has been playing on my mind, so any help would be greatly appreciated.

Your freelance income is not subject to PAYE so you should be completing a self assesment tax return to declare it and it will be taxed.

Your interest from Kaupthing Edge should go on the tax return as well but as they already deduct 20% tax at source, there will be no futher tax to pay.
(This assumes you are not a higher rate tax payer)

HTH

tyllwyd

The bank interest doesn't go on the self-employment section of the tax return, it goes in the general section (sorry, I can't remember what the names of the sections are, but it is very obvious when you come to fill in the forms). You should get an annual statement from your savings account provider showing the amount of interest you've earned and the amount of tax they have already paid to the tax man on your behalf - you put those figures into the tax return, and that is all taken into account when the tax man calculates the amount of tax you owe.

You do need to fill in the information though, because I believe (I could be wrong!) that the banks & building societies provide information to HMRC and it is possible to cross-reference it.

fleeze69

Thanks for your help! I know I have to fill out a self assessment and pay tax on my earnings, just wasn't sure about bank interest, so thanks for clearing that up. Do I also have to declare the interest from my cash ISA as I thought this was tax free?

jem16

fleeze69 wrote: »

Do I also have to declare the interest from my cash ISA as I thought this was tax free?

No you don't need to declare an ISA.