hsbc reg;saver

planteria

i wonder if the benefits will be greater, in that many people will move from automatically having their interest taxed to automatically receiving it gross. have folks been claiming back the tax on their interest via tax returns? what about employees who don't complete tax returns?

Archi_Bald

I would work from the assumption that people will be "reminded" if they are trying to evade their legal duty to declare any savings interest above their allowance. As the HMRC already get information about all interest payments, it won't be very difficult for them to identify delinquents.

planteria

agreed, but have people have been claiming back the tax on their interest until now?

joe134

planteria wrote: »

agreed, but have people have been claiming back the tax on their interest until now?

It's unbelievable how many people have never heard of r85 and r40's
I've tried telling my son, who's wife doesn't work, about using her allowances, but, it seems kids today find, saving , too much like hard work.especially mine;
There's never, a rainy day with them.
He looks after millions for Nhs, and sticks all his brass in one a/c.
None interest .:eek:
I wonder sometimes why I do all this, just to let them blow it, when I'm gone.:)
Old habits die hard.

Archi_Bald

planteria wrote: »

agreed, but have people have been claiming back the tax on their interest until now?

I would guess they have not but I can't see how this would relieve anyone from their legal duty to declare their income if it is above the allowance thresholds, and how HMRC could be convinced not to pursue any and all of us for tax owed.

planteria

sorry, i realise we are well off topic now, but i am a taxpayer so interest is paid net of tax on my savings accounts.
in the past i completed an R85.. but should i have been claiming back the tax paid too? if so, i haven't, and i suspect many others won't have either.. whereas the new system will automatically have interest paid gross.:T

Eco_Miser

If you completed an R85 there would be no tax paid on that account, so nothing to claim back.
For comparatively few people R85s were not an option as there was tax to pay on some of their interest, but not all. For these the options were to reclaim the tax overpaid on an R40, or forgo that overpaid tax completely.

polymaff

I'd suggest that the only direct advantage of gross interest being paid from 6th April 2016 is that you can derive extra interest from the investment of the tax that would otherwise have been deducted at source. It will indirectly benefit those who haven't been exercising their right to R85/R40.

On the flip-side, there will, I'm sure, be a significant number of non-declaring folk who will be penalised - HMRC digital nowadays believing that they have sight of just about all interest payments made. The other downside of HMRC digital is hinted at by their proposal to render quarterly demands to the self-employed. If this is extended to individuals - and you can see exactly why HMRC would be keen to do this - then the future advantage of gross interest becomes somewhat diluted - and the opportunity to be penalised for not making a due payment quadrupled.

planteria

polymaff wrote: »

..It will indirectly benefit those who haven't been exercising their right to R85/R40..

agreed. and i think there will be many in that boat.

joe134

planteria wrote: »

agreed. and i think there will be many in that boat.

That will mean a big loss for Hmrc, so it will mean they will recoup it another way.