Santander Interest - Foreign Income?

dealsearcher

I, like many, have had an Abbey (National) account for many years. Now it has been taken over by Santander I notice my tax Accountant is putting the (miniscule) amount of interest from my esaver account down as 'foreign income'. What?

On querying this I was told they are a foreign bank and therefore it comes under foreign income. However the interest is wholly gained within the UK from a bank registered in the UK.

This may effect others who may have substantial amounts of interest from Santander having been with them for many years and earning (or unearning?) interest from the Abbey.

ceeforcat

I think you should have a word with your accountant - ask him how he intends to account for the UK tax that may have been deducted. Point out the range of ISA's offered by this bank, particularly as ISA's are only available in the UK.

chrismac1

This is taxed UK interest unless you're being paid it gross with an R85. Ask him if HSBC interest comes under China!

dealsearcher

The amount of interest earned (or unearned) for the year was just 10p. So there are no tax implications as such a small amount would not appear on my tax return. I only noticed it because it appeared as a separate entry under 'Foreign Income' on the accountants tax computation.

I actually made the point to the accountant that HSBC is treated as UK earnings despite the fact that it stands for the Hong Kong and Shanghai Bank! However they may be looking at the location of the head office or something like that. I believe that HSBC is now located in the UK, but I am not be sure. Santander may well be based in Spain, presumably in Santander.

However that should not matter. What does matter, surely, is where the business is done and where you receive the income. Both of these are in the UK.

ses6jwg

It sounds like your accountant is a moron and I would question my judgement at using someone who thinks interest paid by a UK bank operating under a UK banking license is classed as "foreign income".

The only foreign income you will get from Santander is, I believe, dividends from any shares you hold in the company.

Mikeyorks

dealsearcher wrote: »

The amount of interest earned (or unearned) for the year was just 10p. So there are no tax implications as such a small amount would not appear on my tax return.

Agree with that. But I would still pull your accountant up for it. If he starts implying to HMRC that you have foreign income, at some future date, it might be a little difficult persuading them otherwise. I'd nip him in the bud!

heretolearn_2

you do know the word 'accountant' isn't protected in any way and any Tom, !!!!!! or Harry can call himself one?

This is such an idiotic line to take that I can't believe that's a real accountant you have there. Go find one that isn't hopeless.

tyllwyd

By your accountant's logic, if you were an employee working for Abbey in a high street branch in the UK, would your salary be foreign income?

FTBFun

I echo the comments of others, in that it is not foreign interest income.

Out of curiosity is he a member of any professional body?

ceeforcat

FTBFun wrote: »

I echo the comments of others, in that it is not foreign interest income.

Out of curiosity is he a member of any professional body?

Most likely a foreign body.

dealsearcher

The accountant is a major accountancy firm. I should not name them. But that is why I initially thought they must know something I didn't. After all if I knew all about tax accountancy myself I would do my own tax accounts! And a major firm would not get a basic thing wrong surely? Obviously they do.

Strange. You hear of rich people having 'good' accountants who do 'creative' accounting. Just my luck to have one who 'creates' against my interest! I might just have to change accountant.