R 85

Just_landed

Hi
I have a friend (don’t we all) who at the moment has income which is below their personal allowance limit, so I suggested that they have their savings income paid gross (monthly) using an R85 form . To which they put this question to me :- If they did that then they came into an amount of money halfway through a Tax year and put it into another savings account paying interest, which would then take their income over their personal allowance limit. We understand the 10% rule and what have you. What would be the right way of correcting the situation in the Tax mans eye’s ?
:question:

dzug1

You tell the savings account provider(s) you are no longer entitled to gross interest. They pay future interest with tax deducted.

At the end of the tax year you tell the taxman of the situation (hopefully by letter, at worse through self assessment) and he sorts it out and asks you to pay the difference/gives you a refund.

Just_landed

I thought as much, I wanted to make sure I had the right idea.
Thank you :beer: