Can government check savings?

antrobus

MikeR71 wrote: »

Quick question:

I am just wondering whether the government can check each person's balance in current and saving accounts held at private banks? Do they have permission to do this?

I am just wondering whether it's worth saving or just go out and spend spend spend!

Under s17/18 of the Taxes Management Act 1970 all banks etc submit annual returns to HMRC detailing (inter alia) interest paid and tax deducted. Account balances are not reported, but (obviously) the figure for interest paid will provide a clue as to how much money is involved.

HMRC and DWP have an information sharing gateway. If the DWP asks the question, HMRC will give them the answer.

Voyager2002

srcandas wrote: »

Wasn't aware the law cited expectation as an offence? I appreciate intent under certain circumstances can be but surely 'expectation' is not the same as 'intent'?

The OP is of course free to "expect" to receive full benefits, or to win the lottery come to that! The fact is, if he declares savings above the limit then his benefits will be reduced, while if he were to fail to declare his savings while still claiming benefit then he might well be prosecuted for fraud.

MikeR71

Thanks for all the replies.

The reason for my original question was to find out how much the government knows about us these days. We are being monitored more than ever and it just occurred to me whether they even have access to our personal bank accounts. That's all.

Regarding morals, this is a different issue. But for me much about the welfare state is immoral. There, I said it, and I know I will probably get pilloried for it. But simply put, I find something immoral and disgusting about governments holding a gun to our heads and taking a chunk of our earnings every month through various forms of tax. They then spend it in a way that THEY deem to be right. In my view this runs counter to our basic liberties. People should be able to decide what they do with most of their earnings, help the poor if they wish voluntarily, not by force.

This is made worse when you consider the fact that the government takes most of your earnings, only to hand it back in various forms, called benefit, making you feel dependent on the state. Government has become our master, we the slaves. It should not be this way.

Unfortunately people have been brainwashed into thinking that the welfare state provides equality and social justice, and yet nothing could be more absurd and further from the truth.

Enough ranting.

jimjames

If you want to save, why not do it in a pension as that won't count against assets.If it is just bank accounts they are asking about then S&S ISA may not be relevant so could be another option for savings that are not counted but that depends on the question that is asked.

lisyloo

I agree with Voyager that its the law - and that's not moralising.

What the OP wanted to know was whether (s)he'd be better of spending rather than saving and I'd say a pretty emphatic YES for two reasons.
One is the rather large penalty for saving.
The second is that most goods are rising in REAL terms, so it also makes sense to buy in advance with current inflation.

There are really only two exceptions I can thing of. Goods that might perish or be excess to requirements and are therefore wasted OR goods than are going down in price - that can apply to gadget type things and the lastest technology when it might be better to wait, but in general most goods are going up in price.

MikeR71

Our money is currently in an ISA, earning peanuts at 2%. We also have debts which we pay off every month, as the interest was added on when we borrowed. But I don't suppose the government would want to know about debts to offset any savings?
Typical!!!

snowgo

I think that HMRC certainly check savings. I am very particular about submitting an accurate tax return, but year before last I made a mistake on the figure of my bank interest. I omitted one of the digits in error. A simple typo.

HMRC contacted me, saying I had not disclosed all of my bank interest and provided a name & phone no for specific person to contact to sort it out. They asked me to phone with full information on all my accounts. When I phoned them, it was apparent that the person at the other end already had in front of them a list of all my bank & building soc accounts, the interest I had earned in each, and the tax I had already paid at 20% level (10+ accounts including ones with only very small amounts in them due to poor interest rates payable). This wasn't information I'd put on my tax return, as I'd just put a total figure. When I told them the amount for each account, they verified whether or not it was correct according to them. If it was just 50p or so difference, he said it didn't matter and took my figure. They fully accepted that I had made a genuine error, rather than any attempt to mislead. They billed me for the tax owing, and interest on the amount I owed them. But it was an eye-opener to me that they could put together all the information from my different accounts without missing anything.

p00hsticks

MikeR71 wrote: »

£1 for every £250 seems grossly over the top. No saving gives you such a return so what does the government base this on I never know. It's nearly 20% if I am not mistaken?

There is a common misconception that this rate of deduction is (or should be) set at a level equivalent to the interest you could earn on your savings whilst retaining the whole of the capital - that isn't and to my knowledge never was the way it is intended.

The idea is that means tested benefits should be most available to those in greatest need - and those woh have more than a certain amount of savings are expected to dip in to those savings to supplement the means tested benefit until they are reduced to the permitted level (currently £6,000) - that's what 'saving for a rainy day' is all about.

A.Galloway

I think if I had £6,000 or near it, I wouldn't want government handouts!

A.G

srcandas

lisyloo wrote: »

I agree with Voyager that its the law - and that's not moralising.

lisyloo so 'expectation' is against the law?

I don't believe Mike has any intention of breaking the law. He has said so. He is showing his frustration at injustice. Nowt wrong with that.

He is also exploring his options. He chose to do so here on this forum. If he was rich he'd be doing it with his accountants and lawyers. The only difference is that lawyers and accountants do not accuse their clients of breaking the law without the full facts.

Back to topic I think the pension option is a problem as Mike is looking towards a house deposit. The household goods I hadn't considered as an investment but if you have the space? that has got me thinking. Gifts to children depends I guess on the relationship Mike has with his kids :rotfl: "Heh son can you lend me the money for a house deposit?"