Inland revenue (IR) interest in stoozing?

Paul_Herring

smartsaver wrote:

All is revealed. Mrs IR thinks we should be paying tax on our offset mortgage.

Colour me stupid, but I can't make sense of this statement - why should HMRC expect anyone to pay tax on a *borrowed* sum?!?

Thanks for the update anyway - I notice the thanks button hasn't come back yet.

smartsaver

Paul_Herring wrote:

Thanks for the update anyway - I notice the thanks button hasn't come back yet.

Thats because is isn't showing on my PC for some reason. I always thank when I can and when deserved...

Robert_Sterling

Minerva wrote:

In my experience, the Banks send the IR details of any interest that you have earned. Unfortunately, in my case, whilst they told the IR, they didn't have the courtesy to send me the same information - result - I under declared the interest that I received.
Thanks HXXXFXX bank!
Minerva

The HXXXFXX Bank always tell me how much interest they have paid me.

realaledrinker

gingercordial wrote:

Basically if a credit card is willing to lend you money at 0%, you can take that money and put it in a savings account and earn about 5% interest, which you keep when you eventually have to pay off the card. But it does get rather more complicated in practice...

..... like having to pay tax on the interest and accounting for the extra tax on your tax return where you are a higher rate tax payer. Which is where we came in!


I'll get me coat.

Quincy_3

The Above post is spam.

gelato_cat

That's strange - I get interest statements from them just after the end of every tax year specifically in case the IR wants evidence. What kinds of accounts have you got with them? I got them for my mini ISA, regular saver and monthly saver. Didn't get anything for my current account.

You can also check the state of your accounts online and have a look at how much interest you've been paid and how much tax (if any) was deducted.

Suze

Minerva wrote:

In my experience, the Banks send the IR details of any interest that you have earned. Unfortunately, in my case, whilst they told the IR, they didn't have the courtesy to send me the same information - result - I under declared the interest that I received.

Thanks HXXXFXX bank!

Minerva

esthomizzy

Clariman wrote:

Higher rate tax payers need to declare any (non-ISA) savings interest that they have earned so that they pay the additional tax. Stoozing profits are no different to any other savings account interest in that respect, but anyone who thought they might get away without doing so, should think again.

Clariman

Ahh this is just the information I needed. If my PAYE income for last year came to 33626 but my actual salary is 39302 is that why I haven't been notified that I'm officially a Higher rate taxpayer yet because technically it's only just happened? Is there any way I can tell this from my tax code the P60 for last year says 474L which I thought was the regular non higher rate taxpayer code, my latest payslip gives a code of 503L so I suppose that is the updated higher tax code or maybe it's just inflation to the limit you can earn before tax actually? Supposing my earlier estimation was the case my question of sorts is do I need to do something in order to be charged the 40% on interest to my savings. This will I daresay be a negligible amount but I don't want to get on the wrong side of the taxman by mistake and it will also make a difference to whether or not I hang onto money in one of the top paying regular saver accounts or pay it straight off the mortgage instead.

esthomizzy

isasmurf wrote:

If you are a higher rate taxpayer and your only income is through PAYE and savings then the extra tax on the savings interested is collected through your tax code. This is now standard practice to reduce the number of SA returns.

I am so happy to hear that I don't have to do anything about doing a self assessment to make sure I pay the correct amount of tax if I am a HRT (apologies for my earlier question on this matter before I read further down). However is it possible to tell from your tax code when/whether they are doing this? Because presumably if you later got a SA form and correctly put down your savings interest information you wouldn't want some keen IR checker to have you paying the tax twice by mistake not having realised that this was already collected via your tax code.

PokerPortal

esthomizzy wrote:

Is there any way I can tell this from my tax code the P60 for last year says 474L which I thought was the regular non higher rate taxpayer code, my latest payslip gives a code of 503L so I suppose that is the updated higher tax code or maybe it's just inflation to the limit you can earn before tax actually?

Your taxcode just means what your personal allowance is, the amount you can earn before you pay tax. This limit increases every year, so your taxcode changes every year. As a rule of thumb you can put a zero behind your taxcode to see how high your personal allowance is.

Paul_Herring

esthomizzy wrote:

Ahh this is just the information I needed. If my PAYE income for last year came to 33626 but my actual salary is 39302 is that why I haven't been notified that I'm officially a Higher rate taxpayer yet because technically it's only just happened?

Probably.

Is there any way I can tell this from my tax code the P60 for last year says 474L which I thought was the regular non higher rate taxpayer code, my latest payslip gives a code of 503L so I suppose that is the updated higher tax code or maybe it's just inflation to the limit you can earn before tax actually?

503L (Though from http://www.hmrc.gov.uk/employers/rates_and_limits.htm I get the impression it should perhaps may be 504L) is the standard PAYE code not taking into account any employer benifits, or changes in circumstance. I'm borderline higher rate and my code is 595L.

Supposing my earlier estimation was the case my question of sorts is do I need to do something in order to be charged the 40% on interest to my savings. This will I daresay be a negligible amount but I don't want to get on the wrong side of the taxman by mistake

Ask for a self assesment (can be done either on paper or on the web.) If they 'refuse' (happened to me once) explain why you think you need it.

and it will also make a difference to whether or not I hang onto money in one of the top paying regular saver accounts or pay it straight off the mortgage instead.

It may make a difference - the savings on your mortgage may outweigh any resultant interest you receive after tax.