Declaring taxed savings to the taxman- Why????

smjxm09

I am filling out my tax credits annual declaration. There is a section called other income where they want to know of any interest paid on taxed savings that amounts to more than £300. We get the standard child allowance but receive no other benefits. Do they want to reduce my child allowance when I have already paid the tax on the interest? Family income is around £38000 excluding around £3500 interest on savings from an inheritance

paddedjohn

They want to know what income you are getting from savings over £300 so that they can include it in your total.

smjxm09

So what is the threshold where they tax you twice?

Horseunderwater

Tax credits is not taxing you at all. It is asking for any other income received over £300. So in your case it is your joint income plus the interest in the region of £3.1k that they wish to know about. That makes your total income for tax credit purposes. From this they work out any TC's due.

itch_for_a_glitch

Do you actually receive tax credits ?
If you do a reduction of 41% is made for income obove a certain level, wherever it comes from.

p.s its not double taxation, its a taper of benefit entitlement due to income.

p.p.s. if you really need to avoid it - buy premium bonds.

smjxm09

So I earn around £30000 and the wife earns around £8,000 with £3500 in joint interest from taxed savings. So would the taxman via tax credits treat the interest earned in the same way if I earned £33500 or the wife earned £11500 and we had no savings? I am thinking that these savings will have no impact on child allowances or money owed as we are hopefully below a threshold.

We don't claim for anything apart from child allowance.

itch_for_a_glitch

smjxm09 wrote: »

So I earn around £30000 and the wife earns around £8,000 with £3500 in joint interest from taxed savings. So would the taxman via tax credits treat the interest earned in the same way if I earned £33500 or the wife earned £11500 and we had no savings? I am thinking that these savings will have no impact on child allowances or money owed as we are hopefully below a threshold.

We don't claim for anything apart from child allowance.

Whats child allowance ?
Do you mean £20.30 child benefit ?
If so dont worry, you wont be affected until (one parents)earnings exceed £50k.

Regardless, fill in the form truthfully.

smjxm09

yep that's the one

notanewuser

smjxm09 wrote: »

yep that's the one

Why are you filling in a tax credits form at all then? :huh:

smjxm09

Why are you filling in a tax credits form at all then?

Now you have got me thinking so I have pulled out the form. This is the annual tax credits HMR &C review for year ending 05/04/2013. My daughter was entitled to get a disability living allowance which was stopped when she turned 16 last October. We still get the £20.30 child benefit as she is still at school.

I have always assumed this form is sent to everyone in the country as a tax return form but have I been getting this form every year because of her then allowance? Going back to my original question will I be expected to pay some of this money back due to the interest received on taxed savings?

notanewuser

Nope. We've never had one (earnings too high).

Here's the info though.

http://www.hmrc.gov.uk/taxcredits/start/who-qualifies/children/disabled-child.htm