Savings and tax

ucms

Hello,

Should I pay additional tax for interest rate if I pay higher rate?
As far I know, bank takes automatically 20% for tax. I can't unfortunately find any information about higher rate payers. I don't fill any forms - I guess my employer does everything.
What should I do?

Thanks,
Piotr

jem16

ucms wrote: »

Hello,

Should I pay additional tax for interest rate if I pay higher rate?
As far I know, bank takes automatically 20% for tax. I can't unfortunately find any information about higher rate payers. I don't fill any forms - I guess my employer does everything.
What should I do?

Thanks,
Piotr

You should be declaring the amount of interest you receive to HMRC. They will then adjust your tax code to take the extra 20% tax due.

ucms

"If you are an employee or a pensioner and already pay tax through a PAYE code, you can sometimes ask for tax that you owe on income, such as savings and property, to be collected through your code number. You'll need to complete a tax return instead if the income you receive is:

• £10,000 or more from taxed savings and investments
• £2,500 or more from untaxed savings and investments
• £10,000 or more from property (before deducting allowable expenses)
• £2,500 or more from property (after deducting allowable expenses)"

If money got from interest rates is less than 10k then I don't have to?

jem16

ucms wrote: »

If money got from interest rates is less than 10k then I don't have to?

You don't have to complete a tax return but you do have to declare the interest as I said.

ucms

How can I declare it? Should I contact with HMRC or I need to fill some forms?
What if it's not regular - I don't get the same interest every month. How can they adjust proper tax code?

jem16

ucms wrote: »

How can I declare it? Should I contact with HMRC or I need to fill some forms?
What if it's not regular - I don't get the same interest every month. How can they adjust proper tax code?

Phone up HMRC and tell them you are a higher rate taxpayer and have savings interest to declare. They will ask you for an estimate of your gross interest in a tax year and will adjust your tax code.

At the end of the year review the amount and contact HMRC again. Do this each tax year.

The other option is to go on Self Assessment although most people would prefer to avoid that.

CLAPTON

are you sure you are a 40% tax payer?

how much do you earn

how much pension payments do you make

what other incomes do you have

xylophone

http://www.hmrc.gov.uk/taxon/bank.htm

"If you're a higher rate taxpayer
If you're a higher rate (40 per cent) taxpayer you must let HM Revenue & Customs (HMRC) know what interest you have received so that they can collect the extra tax due:
If you normally complete a Self Assessment tax return you'll need to declare your savings income on your return.
If you completed a tax return during the 2012-13 tax year, but now pay your higher rate tax through PAYE (Pay As You Earn), the extra tax due on your savings will also be collected through PAYE based on the latest information HMRC has.
If you no longer complete tax returns you can ask HMRC to send you a P810 Tax Review form so they can check on your level of savings and other untaxed income, and then adjust your tax code (or ask you to complete a tax return if necessary).
If you don't normally complete a tax return but have recently moved into the higher rate Income Tax band, you must let HMRC know what savings income you receive by completing a P810 Tax Review form, available on request from HMRC. HMRC will either ask you to complete a return, or, if you're employed or receiving a pension, may arrange to collect the extra tax due through PAYE.
If you're an additional rate taxpayer
If you're an additional rate (45 per cent) taxpayer you'll need to declare your savings on your tax return so that you pay the extra tax due."