Interest Higher Rate Tax

Legacy_user

Savings accounts normally pay interest net of 20% tax.

If you are a higher rate tax payer - how is the extra 20% collected - is up to you to notify the revenue or do they contact you to ask for payment via a tax return/total of interest earned statement?

cheers

cledor

In most cases, higher rate taxpayers are sent annual returns to account for such income. Contact your tax office if you haven't received a return.

Charlton_Taz

Hi. I'm a higher rate tax payer and I don't do a tax return. All I do is sent them a little spreadsheet each year to show them how much interest I earned in my bank accounts during the previous tax year, and then how much I think I owe them. They then just adjust my tax code for the following year to collect the required amount.

MPH80

It's up to you really how you do it - but you do have to inform the revenue of the interest you earn.

Personally - I prefer to fill in the SA form because I've found the the tax code stuff a bit confusing and, because of increasing contributions to my pension - they are always getting the code wrong.

I also like getting the cash in hand refund I get as I bring myself back below into the 22% band.

M.