Advice re 'non taxpayer' please

triplea35

My wife is generally a non tax payer with us using some of our savings to maximise her tax free allowance by receiving gross interest.
We had an exceptional year last year with some additional temporary funds and in good fixed rate accounts coming to an an end in June, and the interest was paid which appears to have taken her over her personal allowance.
She has just received a letter from HMRC which baically states she has exceeded her allowanxe and should notify her Banks etc to pay her interest net forthwith or she will receive a bill for any tax owed next year. There is not a great deal further interest due this financial year and next year with the temporary funds gone and lower rates at present it is likely she will get back below her allownce.
As she/we have accounts dotted around all over the place it seems a carry on to cancel all the gross interest requests and then start them up again next year.
Are we likely to be penalised other than just getting a bill for any additional tax she owes? If not then it seems easier to just leave it for now and be prepared for a bill next year. At least her allowance will have been maximised.
Thanks

fengirl_2

Your wife needs to write to HMRC setting out the interest already earned for this year, plus the expected interest, to show that she will be below her tax free allowance.

triplea35

Thanks for the reply but you have not really understood the question. My wife has already gone over the limit and by leaving the R85's in place there will be a little more interest added this year, She will likely be under the limit next year - 2010/11. By leaving the R85's im place is the bill the HMRC send likely to be any higher than the tax she would have paid.

fengirl_2

She can only be liable to 20% tax, but the law clearly states that if you are over your PA's in any year, then you have to de-register. HMRC rules make it clear that ou have to check your liability from year to year.