Higher rate tax

rach2008

I'm not sure if this is the right place for this one but... I've just had a pay rise and am now in the higher rate bracket. Can anybody tell me what happens to my savings please? Do I need to inform my banks, fill in a tax return, or will 40% be deduced from my interest automatically (instead of the current 20%)?

alanq

No need to inform the banks they only collect tax at 20% (or not at all if you are exempt). If you don't already do so, ensure that you fill in a tax return at the end of the tax year. HMRC will usually collect any additional tax owed by changing your tax code and collecting it via your employer (PAYE) over the course of a year. In the case of large amounts being due a lump sum may need to be paid directly to the tax man.

Lorian

Usually no need to do a full tax return for savings interest, there is a small 1 page form - a P810 Just ask your tax office for it.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnSavingsAndInvestments/DG_4015739

They should then send you a new P810 every 3 years, but contact them if the interested changes dramatically in the meantime.

rach2008

Thanks guys!