Bank Interest Earnings On Self Assessment

hubb

I don't know why HMRC need to know earnings from bank interest earned if you are self employed. Tax is deducted by the bank anyway so why the need to declare ? Normal employees who work at a company get their wages into a bank account but they don't have to inform HMRC.

It's confusing.

BoGoF

All people that complete Self Assessment tax returns (not all of whom are self-employed) need to declare all sources of taxable income. Additional tax may be due if you are higher rate. Employees who are higher rate taxpayers need to declare interest even if they don't receive tax returns.

hubb

But if I declare interest I will be taxed twice. Once by the bank (who take it out) and again when you fill out your self assessment.

theesel1994

You will not be taxed twice as the tax deducted by the bank will be included in the amount of tax deducted at source on the tax calculation. If you add up all the sources of income this may take you into a higher tax bracket.

Another scenario is if your income for the year is less than your personal allowance any tax you have paid on your bank interest will be refunded.

BoGoF

:wall::wall::wall:

hubb wrote: »

But if I declare interest I will be taxed twice. Once by the bank (who take it out) and again when you fill out your self assessment.