Savings on self assessment

wheelz

This year I only had ISAs when I filled in my self assessment. I might have normal savings as well as ISAs next year. What happens exactly? Do I declare all my normal savings? and then? What date do I choose for this, as in balance at what date? There is a long period when you can submit your self assessment. Just wanting to be prepared and knowing what to do with my savings for when I fill in next year's self assessment. I hope my question is clear.

Joanthebone

Your assessment is for the year ending 5th April, so you will know how much interest you have earned in the preceding year, you should get a statement from whoever you have your non-ISA savings with and that will give you the figure for your self-assessment?


You don't have to declare ISA interest.

wheelz

Do you only declare interest, not actual savings? What is the impact on the tax I pay? Do I pay 20 (or 40)% tax on the interest? My tax is paid by changing my PAYE code. I just would like to find out more, understand it better basically.

hugheskevi

There is a long period when you can submit your self assessment.

Which allows individuals time to gather the appropriate documentation to complete their return. If you have all the documentation you can complete the return well before the deadline.

Do you only declare interest, not actual savings?

Yes, you declare interest received in the relevant financial year.

What is the impact on the tax I pay?

The interest is taxable income. The bank will have deducted basic rate income tax unless you have told them not to, you declare the interest on your Self Assessment, the interest is added to your taxable income and any higher/additional income tax due is calculated.

Do I pay 20 (or 40)% tax on the interest?

It depends what your marginal rate of tax is.

I just would like to find out more, understand it better basically.

For any given tax year you have a variety of allowances and tax thresholds, published by HMRC. At the start of each year you have a Tax Code. This is intended to try to ensure you pay roughly the right amount of tax, so takes account of things which are known about in advance. It is unlikely to be 100% accurate, unless your tax affairs are simple. This Tax Code could include adjustments to take account of under or over-payments of tax in previous years.

Throughout the tax year you get whatever income you get, potentially from many sources.

At the the end of the tax year you gather together the relevant documentation to calculate the total taxable income (P60, annual summary of interest from banks, etc). You then enter all the income in Self Assessment. HMRC calculates what your total taxable income was, what tax you have already paid, what tax you should have paid based on the relevant rates, thresholds and allowances, and the difference is the amount of tax owed to or owed by HMRC.

The difference is returned/paid in a variety of ways - in your case, by a Coding Notice adjustment for the subsequent financial year it seems.

windup

you declare the interest received in the tax year from non isa saving accounts, and if you earn enough, you might have to pay extra tax