Self assessment

pramsay13

I've just completed my self assessment online and paid the bill, so I'm done for another year.
I have to fill it out as I rent property so that gets taxed appropriately.
My question is this, there is a section for putting interest received from bank accounts even if it's been taxed.
I didn't bother with this as I only got a few quid and tax was deducted anyway, so I'm not sure why they want it.
Can anyone advise?

Mikeyorks

Because the gross interest forms part of your taxable income .... ?

I don't think they're going to come hunting for you if you didn't complete it and the amounts are minimal. But it completes the job to put it in .... and it costs you nothing as you also show the tax deducted.

But if you are liable for tax at 40% ..... then the interest forms the top slice of your income and you'll be charged an extra 20% on top off that deducted by whoever pays the interest. If you leave that off - you're getting into evasion.

pramsay13

Mikeyorks wrote: »

Because the gross interest forms part of your taxable income .... ?

But surely the fact they immediately take tax off the interest cancels that out.

And unfortunately I'm not in the higher bracket.

System

Box 1 on page TR3 of the tax return asks you to declare your net income and so when your liability is calculated it gives you credit for the 20%tax deducted at source. - http://www.hmrc.gov.uk/forms/sa100.pdf

You are expected to declare all your taxable income in that tax return and that includes interest received from investments.

Higher rate taxpayers would be charged another 20% on that investment income.
Pensioners eligible for higher personal allowance due to their age might find that investment income on top of their pensions means that their total income is of a level where they are entitled to some of their age allowance but not all of it and so they too are expected to declare that taxable income.