Personal Savings Allowance guide

Consumerist

schiff wrote: »

If you were to submit a return for the year to 5.4.2018 showing a total figure for interest lower than their figure, don't they just have to accept it? . . .

As I understand it, HMRC receives reports from the banks about interest received so they will probably use those reports in preference to our returns. It's probably down to us to resolve any discrepancies.

Dazed_and_confused

If you were to submit a return for the year to 5.4.2018 showing a total figure for interest lower than their figure, don't they just have to accept it?

If you can manage to file a return without one being issued to you then yes, that is it the whole concept of Self Assessment.

If HMRC don't like what you have declared then they would have to formally investigate you and they can ask you for information to substantiate your return. They have a limited time to do this (a year I think) and presumably this would be a bit of two'ing and fro'ing
as you would have to say which accounts your total was made up of and then HMRC could presuambly say well what about Al Rayan a/c number x (just an example having read the Daily Express today!).

But it might be simplest to just say you cannot reconcile the amount they have used on the P800 with your records and ask them for a breakdown.

Consumerist

Dazed_and_confused wrote: »

. . . But it might be simplest to just say you cannot reconcile the amount they have used on the P800 with your records and ask them for a breakdown.

I signed up for one of those HMRC online tax accounts but I've always had problems trying to log in so have given it up as a bad job.

Does the online tax account give a breakdown of interest received ?

Dazed_and_confused

Yes. There is a separate thread about this on this board although latest posts are about the information no longer being available for some reason.

It's unclear if this is temporary or not.

sanman8

Hi, I am a newbie to the forum.
Can someone help me to calculate income tax for 2018/19 where employment income is £45,600 and interest earned is £900. I have paid tax through PAYE for the employment income.
Does this make me higher rate taxpayer?
I have marriage allowance, will this be taken away once HMRC receive details of the interest earned?
Does marriage allowance eligibility depend on income including or excluding interest?
Will my personal savings allowance be £1,000 or £500?
What will be my income tax for the year?

Thanks

Dazed_and_confused

Marriage Allowance eligibility isn't based on income. It is whether you are considered a higher rate taxpayer.

And yes, if you are considered a higher rate payer then you will lose your Marriage Allowance tax credit (for the year you are higher rate onwards).

Unless you have pension contributions or gift aid to take into account then yes you would be higher rate as £46,500 puts you above the standard higher rate threshold.

So you will get £500 savings interest taxed at 0% (aka the Personal Savings Allowance).

Consumerist

Dazed_and_confused wrote: »

. . . It's unclear if this is temporary or not.

Thanks.

Perhaps at this time of year HMRC are in the process of updating the info for the current (2018/19) tax year.

zagfles

sanman8 wrote: »

Hi, I am a newbie to the forum.
Can someone help me to calculate income tax for 2018/19 where employment income is £45,600 and interest earned is £900. I have paid tax through PAYE for the employment income.
Does this make me higher rate taxpayer?
I have marriage allowance, will this be taken away once HMRC receive details of the interest earned?
Does marriage allowance eligibility depend on income including or excluding interest?
Will my personal savings allowance be £1,000 or £500?
What will be my income tax for the year?

Thanks

This has been a subject of debate on here as the legislation isn't clear, but from reading from others how HMRC have implemented it, it seems that in your situation you'll end up both losing the marriage allowance and paying tax on £400 of the interest - £250 at 20% and £150 ar 40%, so in total you'll lose £348.

You can avoid this by either paying £150 gross into a pension (this would be £120 net into a private pension), or make a gift aid contribution of £120 to your favourite charity. That would take you out of higher rate, assuming you have no other taxable income, meaning you'd get both the marriage allowance and the £1000 PSA, so you wouldn't pay any tax on the interest. It's a no brainer, give a charity £120 and save £348 in tax!
With gift aid you don't even have to do it this year, as HMRC allow you to backdate gift aid contributions up till the time you do your tax return (assuming you do tax returns, if not you'd probably need to register to).

Dazed_and_confused

Perhaps at this time of year HMRC are in the process of updating the info for the current (2018/19) tax year.

I think that is wishful thinking!

The banks have until 30 June after the tax year ends to report details to HMRC so I don't think they will have anything just for 2018:19

badger09

Consumerist wrote: »

As I understand it, HMRC receives reports from the banks about interest received so they will probably use those reports in preference to our returns. It's probably down to us to resolve any discrepancies.

Sadly, what HMRC did in my case and that of my late sister, was to
revise correct figures of interest (for 2016/17 which we provided in writing) downwards, based on incomplete information provided by the banks.

It was easy to spot the errors in relation to my late sister as the only interest included was from Santander. 2 Aldermore accounts and one with NS&I were conspicuous by their absence.

They eventually corrected their calculations, but only after after several letters as my sister had since died:(.