Bank v Tax Office query

Euromoney

Hello,

First post.

I currently have an account with a major high street bank which I should be paying tax on but am not. It's only a very small amount but I'd rather deal with it.

I have spoken to the bank who insisted I needed to speak to my tax office for the form. I spoke to the tax office who told me to let the bank know as they deal with it.

So I'm stuck! Who is right about this and what do I need to do to get this resolved ?

Also, is there an easy way to calculate the tax I need to pay back ? i.e., would the bank/tax office do it ?

Thanks!

McKneff

Euromoney wrote: »

Hello,

First post.

I currently have an account with a major high street bank which I should be paying tax on but am not. It's only a very small amount but I'd rather deal with it.

I have spoken to the bank who insisted I needed to speak to my tax office for the form. I spoke to the tax office who told me to let the bank know as they deal with it.

So I'm stuck! Who is right about this and what do I need to do to get this resolved ?

Also, is there an easy way to calculate the tax I need to pay back ? i.e., would the bank/tax office do it ?

Thanks!

Not really sure what you mean but if you mean the tax on the interest, then it is taken off at source by the bank, (it is just not written down anywhere) so the interest you are paid by the bank to you is already taxed.

Is that what you mean.?

CLAPTON

why do you think you are receiving interest gross?

Euromoney

McKneff wrote: »

Not really sure what you mean but if you mean the tax on the interest, then it is taken off at source by the bank, (it is just not written down anywhere) so the interest you are paid by the bank to you is already taxed.

Is that what you mean.?

Yes of course tax on the interest.

On this account it hasn't been deducted. It (the statement and online) states interest as gross as opposed to net. Hence my original post.

Euromoney

CLAPTON wrote: »

why do you think you are receiving interest gross?

:wall::wall::wall:

CLAPTON

you need to tell the bank to tax the interest at source from now on and they may be able to change this tax year.
however they will not in general change last tax year ... you will need to tell the tax man about this and pay what is due

how much tax are we talking about here?

dzug1

There are some accounts (most business accounts for example) on which banks will only pay interest gross - so the bank may be right in referring you to the tax office, since it's your responsibility to declare it and pay the tax.

From your post it sounds as though both the bank and the tax office may have misunderstood your query - it more normally occurs the other way round

CLAPTON

Euromoney wrote: »

:wall::wall::wall:

could be seen as somewhat discourteous

Mikeyorks

Euromoney wrote: »

Yes of course tax on the interest.

On this account it hasn't been deducted. It (the statement and online) states interest as gross as opposed to net. Hence my original post.

Your original post could mean anything - it lacks any meaningful detail, and your extra post still leaves more questions than answers. If interest is being paid gross then it generally means you have organised it that way by filing an R85. If tax is due then you need to rescind the R85 - and declare the gross interest to HMRC if your Bank don't / can't backdate the R85.

The alternative is that this is a QTD account (Qualifying Time Deposit)? If that's the case the Bank won't deduct interest and you have to declare it to HMRC directly :-

An account is a QTD if the terms & conditions for the account meet the five criteria below:

• the deposit is at least £50,000
• repayment to be made at a specified time within five years of the QTD being made
• makes no provision for the right to repayment to be transferred
• prevents partial withdrawals
• prevents additions

Euromoney

CLAPTON wrote: »

you need to tell the bank to tax the interest at source from now on and they may be able to change this tax year.
however they will not in general change last tax year ... you will need to tell the tax man about this and pay what is due

how much tax are we talking about here?

So it is definitely the bank and not the tax office or is this just your opinion ? (not intending to sound rude)

The tax is less than £50. I'd just rather pay it and forget about it rather than leave it.

Euromoney

CLAPTON wrote: »

could be seen as somewhat discourteous

I was a bit frustrated at you asking how I had decided it was gross interest I was receiving. I think you should have assumed I knew it was gross and not net instead of asking the question.

No offence intended and thanks for your last answer.