Tax on Savings Interest - HMRC records

gkerr4

i find it hard that you wouldn't have accurate records of who paid you what interest across the year - particularly if you are in the position of having to split your accounts to maintain FSCS protection. Its not a small amount.

I have the same 'issue' (#firstworldproblemseh?) but keep detailed spreadsheets of the interest which is paid to each account each month, or indeed annually as the case may be. The same sheet records any dividends from shares & ETF's - Its split into
"taxable" - where i am 100% liable to pay additional tax on the interest
"joint" where it is a joint account and the liability is shared.
and "tax exempt" for any interest or dividends paid to an ISA account.

and of course it records oversees dividend payments for any oversees traded stocks for which there is often a tax credit due.

I've worked hard over the past couple of years to move everything in the the 3rd category where possible so now i don;'t need to worry so much.

in the past, I have been subject to an HMRC investigation into the additional tax due on interest and my clear records were able to quickly close the case. Its best to avoid these things as they can be quite stressful.

Old_Slaphead

On a not disconnected issue, how long are you supposed to keep tax related records (or, basically, when can I chuck old stuff away) ?

le_loup

Six years.

talexuser

le_loup wrote: »

Six years.

Unless it's MP's expenses, they can be shredded after 3 years so no more investigations can take place

gizz_mo

gkerr4 wrote: »

i find it hard that you wouldn't have accurate records of who paid you what interest across the year - particularly if you are in the position of having to split your accounts to maintain FSCS protection. Its not a small amount.

I have the same 'issue' (#firstworldproblemseh?) but keep detailed spreadsheets of the interest which is paid to each account each month, or indeed annually as the case may be. The same sheet records any dividends from shares & ETF's - Its split into
"taxable" - where i am 100% liable to pay additional tax on the interest
"joint" where it is a joint account and the liability is shared.
and "tax exempt" for any interest or dividends paid to an ISA account.

and of course it records oversees dividend payments for any oversees traded stocks for which there is often a tax credit due.

I've worked hard over the past couple of years to move everything in the the 3rd category where possible so now i don;'t need to worry so much.

in the past, I have been subject to an HMRC investigation into the additional tax due on interest and my clear records were able to quickly close the case. Its best to avoid these things as they can be quite stressful.

I guess you are in the upper quartile of super organised people. Your average person including myself doesn't really have time to maintain spreadsheets although it's a nice idea. It never would have been an issue if savings accounts didn't revert to paying 0.01% interest after a year etc. The reason I am concerned is because 2 years ago I moved all my cash out of an ING Direct savings account when the rate changed and requested the account be closed. As an online only account I never received anything after that. I got a tax statement for the relevant interest and thought nothing more of it. No further communication was ever sent to me. Then when ING Direct was bought by Barclays I received communications advising of my new bank details which raised the alarm, I called them up and found out I had £200 in that account which was interest that had been credited after I'd emptied the account. And that had been accumulating a tiny amount of interest for the last year or so. As I hadn't been aware of this I hadn't disclosed it on my self assessment. Granted it was tiny amounts of interest accumulating in pennies each month, but still highlights the point that things like this can happen, and the more accounts people have , especially with the current trend of spreading across numerous current accounts etc, this is more likely to happen, and I know from discussing with colleagues they also have similar issues.
I know you all think we should update spreadsheets and maintain detailed records, but let's face it not everyone has the time. If the banks are quoting our NI number every time they pay HMRC on our behalf, in this age of online accounts we should be able to get a statement in our tax account showing what's been paid to HMRC and by which Banks.

p00hsticks

gizz_mo wrote: »

If the banks are quoting our NI number every time they pay HMRC on our behalf, in this age of online accounts we should be able to get a statement in our tax account showing what's been paid to HMRC and by which Banks.

but as far as I'm aware, the banks AREN'T quoting our NI number each time they pay HMRC - in fact, unless it's a ISA, I'm not sure they'd necessarily know our NI number. All they're doing is taking 20% off tax off the interest they pay out on any accounts they haven't received an R85 form for and handing it over to HMRC as one big payment - I don't believe it's split by individuals.

gkerr4

gizz_mo wrote: »

I guess you are in the upper quartile of super organised people. Your average person including myself doesn't really have time to maintain spreadsheets although it's a nice idea. It never would have been an issue if savings accounts didn't revert to paying 0.01% interest after a year etc. The reason I am concerned is because 2 years ago I moved all my cash out of an ING Direct savings account when the rate changed and requested the account be closed. As an online only account I never received anything after that. I got a tax statement for the relevant interest and thought nothing more of it. No further communication was ever sent to me. Then when ING Direct was bought by Barclays I received communications advising of my new bank details which raised the alarm, I called them up and found out I had £200 in that account which was interest that had been credited after I'd emptied the account. And that had been accumulating a tiny amount of interest for the last year or so. As I hadn't been aware of this I hadn't disclosed it on my self assessment. Granted it was tiny amounts of interest accumulating in pennies each month, but still highlights the point that things like this can happen, and the more accounts people have , especially with the current trend of spreading across numerous current accounts etc, this is more likely to happen, and I know from discussing with colleagues they also have similar issues.
I know you all think we should update spreadsheets and maintain detailed records, but let's face it not everyone has the time. If the banks are quoting our NI number every time they pay HMRC on our behalf, in this age of online accounts we should be able to get a statement in our tax account showing what's been paid to HMRC and by which Banks.

many valid points - i don't think i am "Super organised" - it takes minimal upkeep and as i said, it fended off an investigation when it needed to - i was glad i did it just for that.

colsten

p00hsticks wrote: »

I don't believe it's split by individuals.

I believe it is, they need it split for European Savings Directive reporting purposes. But they won't have the NI number for most non-ISA accounts.

gizz_mo wrote: »

I know you all think we should update spreadsheets and maintain detailed records, but let's face it not everyone has the time.

It's a lot less effort than you make it sound. Interest gets paid no more frequently than once a month, more likely just once a year. Surely you find the occasional couple of minutes to check your accounts and to jot some numbers down once a month or once a year? Surely you know what money you put where, and check on it now and then to see whether the right interest has been added. I'd be quite cross with myself, for example, if I had missed £200 interest.

Stop trying to blame the banks and HMRC and assume responsibility for your own money.

le_loup

gizz_mo wrote: »

but let's face it not everyone has the time.

What would they be doing with the half hour a year that they would spend doing that?
Watching strictly, going for a drink, rowing with the significant other, checking facebook, tweeting what they had for breakfast?


If they were nursing a sick spouse or having sex, then that's OK.

eskbanker

le_loup wrote: »

half hour a year

le_loup wrote: »

having sex

Darling, I never even realised you were posting on here!